The official manufacturing purchasing managers’ index (PMI) last month rebounded to 51.4, ending seven months of declines, as most sectors reported improvements, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
CIER president Yeh Chun-hsien (葉俊顯) said that the manufacturing industry’s operating conditions appear to be in the process of bottom-building, although it is premature to speculate on a solid recovery, as visibility remained poor and a holiday effect was lingering.
“More working days in February this year was a factor in the advance of 11 points in the latest PMI value, despite seasonal adjustments,” Yeh said.
Photo: Tyrone Siu, Reuters
PMI data aim to measure the health of the manufacturing industry, with values of 50 and higher indicating expansion and scores lower than the threshold signifying contraction.
Taiwan is home to the world’s major contract suppliers of electronics used in smartphones, notebook computers, servers and high-performance computing for US technology titans.
A sustained recovery depends a lot on global inflation and the US Federal Reserve’s monetary policy stance, Yeh said, adding that the Fed sounded dovish early last month, judging from its moderate rate hike of 0.25 percentage points.
However, the Fed faces pressure to tighten more after latest US inflation data proved stronger than expected, he said.
The subindex for new business orders gained 16.7 points to 51.1, while the reading on industrial output soared 30.3 points to 62.4, the CIER’s monthly survey found.
Last month had more working days than a typical February because the Lunar New Year holiday fell entirely in January, Yeh said.
The subindices on employment, delivery times and customer inventory levels gained ground, although they remained in the contraction zone, the survey showed.
The six-month business outlook gained 5.8 points to 44.7 as firms recovered some confidence, CIER researcher Chen Shin-hui (陳馨蕙) said.
The outlook improvement helped bolster prices for raw materials, with the measure rising 8.1 points to 62.6, reversing eight months of downturns, the survey showed.
The increase in prices for raw materials helped drive the PMI rebound, suggesting little improvement in demand, Yeh said, adding that the result would add to inflationary pressure.
It is better to wait for data from this month and next month to gain a better understanding of markets, he said.
The Taipei-based think tank said that firms should build inventory of critical raw materials and closely monitor economic twists in China.
The non-manufacturing index edged up 0.1 points to 50.2, expanding for the fourth consecutive month, the institute said.
Business activity gained momentum in the construction and property sectors, as well as at non-school education providers, it said.
Service providers such as restaurants, hotels and retailers remained upbeat about their operations six months ahead, while other sectors were relatively conservative, it said.
SOLID FOUNDATION: Given its decades of expertise in megatronics, manufacturing and robotics, Japan has the wherewithal to create its own AI, Jensen Huang said Nvidia Corp plans to help build an artificial intelligence (AI) tech-related ecosystem in Japan to meet demand in a country eager to gain an edge in this emerging technology. The US company will seek to partner with Japanese research organizations, companies and start-ups to build factories for AI, Nvidia CEO Jensen Huang (黃仁勳) said yesterday during opening remarks in a meeting with Japanese Minister of Economy, Trade and Industry Yasutoshi Nishimura. The company is to set up an AI research laboratory, and invest in local start-ups and educate the public on using AI, Huang said. Huang earlier this week met with Japanese Prime
Huawei Technologies Co (華為) is among a field of “very formidable” competitors to Nvidia Corp in the race to produce the best artificial intelligence (AI) chips, Nvidia chief executive officer Jensen Huang (黃仁勳) said yesterday. Huawei, Intel Corp and an expanding group of semiconductor start-ups pose a stiff challenge to Nvidia’s dominant position in the market for AI accelerators, Huang told reporters in Singapore. Shenzhen-based Huawei has grown into China’s chip tech champion and returned to the spotlight this year with an advanced made-in-China smartphone processor. “We have a lot of competitors, in China and outside China,” Huang said. “Most of our competitors
TAPPING TAIWAN? TSMC is committed to hiring locally, but circumstances might require the firm to bring in foreign workers with specialized experience, they said Arizona labor unions and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) have reached an agreement to resolve labor disputes that have dogged the chipmaker’s construction site in Phoenix, Arizona, they said in a joint statement. The new accord is the result of months of negotiations between the world’s leading chipmaker and the Arizona Building and Construction Trades Council (AZBTC), a coalition of unions with 3,000 members on site — about one-quarter of TSMC’s total construction workforce. Under the agreement, TSMC — which is investing US$40 billion in Arizona — plans to partner with unions to develop workforce training programs and maintain transparency on
Global semiconductor industry revenue is expected to grow 16.8 percent year-on-year next year, following a slump this year, largely fueled by a surge in demand for memory chips, US-based market information advisory firm Gartner Inc said on Monday. Gartner said the global semiconductor industry is forecast to generate US$624 billion in sales next year, up from US$534 billion this year, during which revenue is predicted to fall 10.9 percent amid inventory adjustments caused by weak demand. The global market for memory chips is expected to rebound next year by 66.3 percent, following a fall of 38.8 percent this year due to oversupply