Fixed-asset purchases, excluding land, by the manufacturing sector in the second quarter of this year rose 13.1 percent year-on-year, ending five consecutive quarters of decline, the Ministry of Economic Affairs said in a report on Tuesday.
The ministry attributed last quarter’s improvement to semiconductor companies’ accelerating the development of advanced-process technologies and the expansion of high-end packaging capacity to meet the strong demand for artificial intelligence and emerging technology applications.
Fixed assets include machinery, equipment, buildings and construction projects, as well as furniture, fixtures and vehicles.
Photo: Cheng I-hwa, Bloomberg
Battery and power equipment manufacturers’ capacity expansion in light of rising demand for green energy, grid resilience and power system improvements also contributed to the progress in last quarter’s fixed-asset purchases, it said.
The purchases rose to NT$482.2 billion (US$15.02 billion) during the second quarter from NT$426.5 billion a year earlier. On a quarterly basis, the second-quarter purchases increased 44.1 percent from NT$334.6 billion in the previous quarter, it said.
Meanwhile, total revenue brought in by the manufacturing sector, including overseas production, increased 8.1 percent annually in the second quarter to NT$8.03 trillion, reversing six consecutive quarters of negative growth, the report said.
Last quarter’s revenue grew 8.9 percent from NT$7.37 trillion in the previous quarter, it said.
Within the manufacturing sector, the electronic components industry posted the largest purchases in fixed assets in the second quarter, at NT$327.6 billion, the report showed.
The amount is a 26.3 percent increase from a year earlier and accounted for 67.9 percent of total purchases by local manufacturers in the quarter, it said.
The chemical materials industry was second in terms of fixed-asset purchases as firms spent NT$20.8 billion, but the figure was down 27.5 percent year-on-year, it said.
The metal, computer and optoelectronics industries, and oil and coal production also reported that purchases dropped 3.1 percent, 9.9 percent and 22.5 percent respectively from a year earlier, it said.
Nonetheless, the base metal, machinery equipment and power equipment industries increased purchases by 3 percent, 9.5 percent and 73.5 percent year-on-year respectively in the quarter, it said.
The manufacturing sector’s fixed-asset purchases in the first half of the year totaled NT$816.8 billion, down 6.3 percent from the same period last year, it added.
Looking ahead, semiconductor firms’ continued capacity expansion and the improving outlook for end-market demand, as well as firms’ growing interest in net zero, automation and digitization trends should continue to boost investment momentum in the manufacturing sector, the ministry said.
However, as external headwinds remain ahead such as the implications of central banks’ interest rate adjustments, US-China tech competition and geopolitical tensions, manufacturers should remain cautious about their capital spending, it said.
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