Taiwan’s manufacturing output last quarter shrank 9.44 percent from a year earlier to NT$4.54 trillion (US$142.52 billion) due to tepid end-market demand for tech and non-tech products and lingering inventory adjustments, the Ministry of Economic Affairs said in a report released yesterday.
Output was down for a fourth consecutive quarter, dragged also by firms’ lack of interest in capital spending in the face of a business slowdown, the report said.
Industrial production fell by a steeper 11.43 percent to 87.69, marking the fifth straight quarter of decline, as all major sectors took a hit from global inflation and restrictive monetary policy, it said.
Electronic component manufacturers reported an industrial output of NT$1.38 trillion, declining 11.95 percent year-on-year, as demand for chips softened and clients digested inventories, limiting business for local suppliers of chips, printed circuit boards and Ajinomoto build-up film, or ABF, substrates, it said.
Flat panels bucked the downtrend by posting a 28.05 percent gain to NT$146.8 billion, thanks to restocking demand for large-screen TVs, it said.
Industrial production for computers and optical devices picked up 17.05 percent to a new high of NT$369.5 billion, driven by strong demand for data centers, cloud solutions and artificial intelligence (AI) applications, it said, adding that servers were a main beneficiary.
Suppliers of non-tech products fared weaker, as industrial output at firms making chemical materials and fertilizers slumped 16.64 percent, base metals fell 14.75 percent and machinery equipment contracted 14.51 percent, it said.
As global trade slowed, companies turned conservative on purchases of machinery equipment and input materials, it said.
Chips and parts used in vehicles held steady, with industrial output edging up 1.97 percent to NT$127.9 billion, as major players stimulated sales through active promotions and new model launches, it said.
Taiwanese manufacturers might come out of the woods with the release of new-generation technology products and peak sales season in China and the West, the ministry said.
Several tech firms earlier gave a positive business guidance for this quarter and beyond ahead of China’s Singles’ Day shopping festival this month and the upcoming holiday season in the West.
Booming demand from high-performance computing, AI and electric vehicles would continue to benefit local suppliers, the ministry said.
However, companies need to need to remain alert amid rising geopolitical tensions, technology competition between the US and China and the unfavorable impact of previous rate hikes, it said.
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