The nation’s industrial production plunged 22.86 percent year-on-year last month, as semiconductor and flat-panel makers took a severe hit from prolonged inventory correction due to macroeconomic uncertainty, the Ministry of Economic Affairs said yesterday.
The index slid to 76.4 last month, hitting the lowest level in about four years after an 11-month losing streak.
The index of manufacturing production, a major contributor to industrial production, dropped 23.52 percent annually to 75.85 last month, which was also the poorest performance in about four years.
However, with the local supply chain inventory gradually improving since the beginning of this year, the manufacturing production index this month could pick up sequentially, the ministry said, adding that it expects the figure to climb 4.8 percent to 79.51 this month at best or decline 0.4 percent to 75.51 at worst.
“The semiconductor industry’s performance last month was a drag on manufacturing production because of inventory digestion in the supply chain,” Department of Statistics Deputy Director-General Huang Wei-jie (黃偉傑) said by telephone. “As the issue is likely to persist in the third quarter, the outlook for manufacturing production remains bleak.”
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told investors last month that inventory adjustments would extend into the next quarter before rebalancing to a healthier level, one quarter longer than the company had expected, due to macroeconomic uncertainty.
On an annual basis, manufacturing production would continue its downtrend, falling between 21.1 percent and 25.1 percent this month, Huang said.
To better track developments in the local semiconductor supply chain, the department last month added chip designers such as MediaTek Inc (聯發科) to the index last month.
The production of electronic components plunged 31.1 percent year-on-year last month, with semiconductor and flat panels suffering the steepest decline of more than 33 percent each.
Computers and optical component production dropped 14.01 percent last month on weak demand, while servers and switches posted robust growth last month, it said.
Basic metals, mainly steel, fell 11.57 percent as manufacturers contended with sluggish demand and high inventories, while some used the downturn to undertake equipment maintenance, it said.
Petrochemicals contracted by 19.37 percent due to reduced demand, while machine tools plunged 24.72 percent as most companies slowed capacity expansion in response to a weak macroeconomy, the ministry said.
Automotive production slid 2.94 percent, the smallest retreat in the manufacturing segment, thanks to strong domestic demand, the ministry said.
SEMICONDUCTORS: Under India’s chipmaking incentive plan, the government would bear half the cost of any approved project, with an initial budget of US$10 billion for the task The Indian government, after years of watching from the sidelines of the chips race, now has to evaluate US$21 billion of semiconductor proposals and divvy up taxpayer support between foreign chipmakers, local champions or some combination of the two. Israel’s Tower Semiconductor Ltd is proposing a US$9 billion plant, while India’s Tata Group has put forward an US$8 billion chip fabrication unit, people familiar with the matter said. Both projects would be in Indian Prime Minister Narendra Modi’s home state of Gujarat, the people said. Semiconductors have grown into a key geopolitical battleground, with the US, Japan and China investing heavily in
CHIEF OPERATING OFFICERS: Y.J. Mii, who is in charge of R&D, and Y.P. Chyn, who is responsible for fab operations and management, start their new positions today Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday promoted Y.J. Mii (米玉傑) and Y.P. Chyn (秦永沛) as co-chief operating officers (COO) of the world’s biggest contract chipmaker, signaling the formation of a succession team. The latest executive reshuffle comes after TSMC chairman Mark Liu (劉德音) in December last year announced that he is to retire this year. CEO C.C. Wei (魏哲家) has been recommended as his successor while continuing to serve in his current position. Mii and Chyn, as well as the company’s human resources, finance, legal and corporate planning units, are to report directly to Wei, a company statement released after the
The Japanese government-backed research group developing semiconductors is to partner with US start-up Tenstorrent Inc on the design of its first advanced artificial intelligence (AI) chip. Tenstorrent, led by Tesla Inc and Apple Inc veteran Jim Keller, would license its design for part of Japan’s AI accelerator and also codesign the overall chip, the US company said yesterday at a joint event in Tokyo. Working with the open-source RISC-V standard, Tenstorrent aims to provide customers with an alternative to the leaders Nvidia Corp and Arm Holdings PLC, who have their own so-called instruction sets to communicate between hardware and software. The government is
AI PRIORITIZED: Analysts said the move was a good strategic decision for Apple, which was still years away from producing a vehicle and facing a cooling market Apple Inc is canceling a decade-long effort to build an electric vehicle (EV), people with knowledge of the matter said, abandoning one of the most ambitious projects in the history of the firm. Apple made the disclosure internally on Tuesday, surprising about 2,000 employees working on the project, the sources said. The decision was shared by Apple chief operating officer Jeff Williams and Kevin Lynch, a vice president in charge of the effort, the sources said. The two executives told staff that the project would begin winding down and that many employees on the EV team — known as the Special Projects Group