The climate monitor for the nation’s manufacturing sector in December last year was “blue” for the second consecutive month, as global inflation and interest rate hikes lowered demand and prices for most products, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.
The TIER business composite index shed 0.24 points to 9.48, indicating a recessionary state, after the sub-indices on demand and selling prices weakened, but the readings for operating conditions, costs and raw material prices improved marginally, the Taipei-based think tank said.
Major customers continued to adjust inventory to cope with soft end-market demand amid a global economic slowdown and monetary tightening, the institute said, adding that Taiwan’s latest exports and export orders declined by double-digit percentage points for two months in a row.
Photo: Ann Wang, REUTERS
China’s recent scrapping of COVID-19 restrictions increased infections in the country, disrupting supply chains, but fueling hopes for a fast recovery, it said.
TIER uses a five-color spectrum to capture the industry’s movements, with “red” indicating a boom, “green” suggesting a steady state and “blue” signifying a downturn. Dual colors indicate a transition to a better or worse condition.
The number of firms in business decline jumped from 59.04 percent in November last year to 73.63 percent in December, and none reported a boom, TIER said.
Demand for electronics used in high-performance computing and electric vehicles remained solid, but sales of smartphones and notebook computers stalled, as global consumers cut back spending on technology gadgets, it said, adding that it caused the business climate for the sector, which is the main export driver, to signal “blue.”
The climate monitor for petrochemical and plastic sectors was also “blue,” as labor shortages in China deteriorated due to spiking virus infections, the institute said.
Firms generally reported a retreat in business, and grew conservative in input and inventory management, it said.
Suppliers of necessity goods such as paper and textile products fell from the “yellow-blue” to “blue” state, as firms wrote off inventory losses to reflect poor demand and selling prices, TIER said.
Makers of metal products continued to struggle with sluggish demand even after major global players cut capacity to ease the imbalance between supply and demand, it said.
Machine equipment vendors held particularly gloomy views, as soft global economic outlook prompted customers to be frugal about buying capital equipment, it said.
Auto parts suppliers said they also took a hit from an overall decline in purchases of durable goods.
The number of new vehicle plates increased by 3.84 percent to 41,900, as consumers sought to avoid price hikes by major vehicle brands this year, rather than a recovery in the business, they said.
After several years flying high as Asia’s best Nvidia Corp proxy, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is increasingly vying with other artificial intelligence (AI) stocks for investor attention. Stock traders are chasing a wider array of beneficiaries as mainstream usage of AI creates demand for hardware beyond the most-advanced chips TSMC makes for Nvidia. Subthemes from the deepening memory crunch to advances in robotics are also luring bids. At the same time, investment caps on single stocks are pushing funds to diversify, while retail investors long familiar with TSMC through its US depositary receipts are being offered a broader set of
UNDER MICROSCOPE: Taiwan detained three people who allegedly conspired to buy servers in Taiwan and export them using fraudulent documentation, prosecutors said Nvidia Corp chief executive officer Jensen Huang (黃仁勳) on Saturday urged Super Micro Computer Inc to tighten up on compliance after Taiwan detained three people this week for allegedly making fraudulent declarations about artificial intelligence (AI) servers made by its US partner. The development marked the nation’s first crackdown on semiconductor smuggling, which grew after the US slapped restrictions on exports of high-end chips such as Nvidia AI accelerators to China. Nvidia is “rigorous” in explaining regulations to all of its partners, Huang told reporters after arriving in Taipei. “Ultimately Super Micro has to run their own company,” he said in response to
TECH RELIANCE: Growth is increasingly reflecting an unequal K-shaped distribution, where technology sectors outperform and other industries struggle, an expert said Standard Chartered Bank has significantly raised its forecast for Taiwan’s economic growth to 9.5 percent this year, up from 7.6 percent previously, citing surging artificial intelligence (AI) demand driving exports, semiconductor production and investment. The upgrade reflects a sustained AI supercycle that continues to fuel demand for advanced chips and technology infrastructure, which form the backbone of Taiwan’s exports, the bank said in a report this week. “We raise our 2026 growth forecast to reflect a much stronger-than-expected first-quarter GDP figure,” Standard Chartered senior economist for greater China and Asia Tommy Wu (胡東安) said in the report. Driven largely by a 35.3 percent
Two of Taiwan’s international carriers, Starlux Airlines Co (星宇航空) and EVA Airways Corp (長榮航空), have retained the five-star airline rating awarded by international airline review organization Skytrax. Starlux was awarded the distinction for a second consecutive year, while EVA Air received it for the 11th straight year, Skytrax said in statements released yesterday and on Thursday last week, respectively. The five-star rating is considered one of the airline industry's highest honors and is awarded following professional audits of airline product and frontline service standards, Skytrax said. The ratings are based on in-depth assessments using unified global quality standards rather than customer review scores
RSS