Taiwan’s manufacturing sector slid back into contraction territory last month, weighed down by expiring US tariff waivers and volatile exchange rates, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
The seasonally adjusted manufacturing purchasing managers’ index (PMI) fell 1.4 points to 49.6, below the expansion threshold of 50, signaling a renewed slowdown in industrial activity.
“The decline reflects rising caution among manufacturers as the suspension of US’ ‘reciprocal’ tariff nears expiration,” CIER vice president Wang Jiann-chyuan (王健全) told a news conference in Taipei.
Photo: Hsu Tzu-ling, Taipei Times
Concerns over shipping reliability and delivery lead times also led firms to trim back production and order volume, he said.
Although the PMI remained close to the neutral 50 mark — indicating a subdued rather than sharply declining environment — key components such as export orders and industrial output weakened, pointing to broader sector-wide hesitation, Wang said.
The CIER said geopolitical tensions, particularly between Israel and Iran, drove crude oil prices higher and ended a two-month downtrend in raw material costs for chemical and biotech producers.
However, tepid end-market demand and cautious inventory strategies limited any significant recovery in procurement activity, it said.
Industry performance was uneven, as the electronics, optics and power equipment sectors remained in expansion mode, but textiles, apparel and transportation-related industries contracted, hampered by shifting supply chains and currency volatility, the CIER said.
Wang flagged the appreciation of the New Taiwan dollar against the US dollar as a growing concern, pointing out that each 1 percent rise in the local currency typically erodes corporate revenue or profits by 0.1 to 0.5 percentage points.
Taiwan Semiconductor Manufacturing Co (台積電), the world’s top contract chipmaker, has reported foreign exchange-related losses — a signal that broader impacts could soon ripple beyond the technology sector, Wang said.
Taiwan’s relatively shallow foreign exchange market, with daily turnover of just US$1 billion to US$2 billion, makes it vulnerable to outsized moves, he said, urging central bank intervention to prevent further disruption — especially amid ongoing US tariff negotiations.
In contrast, the nation’s non-manufacturing sector continued to gain momentum.
The non-manufacturing index rose 2.4 points to 54.3 last month, buoyed by a TAIEX rebound and solid commercial property demand — particularly in emerging hubs such as Taipei’s Beitou-Shilin Technology Park (北投士林科技園區), where Nvidia Corp is looking to open new offices and expand operations.
New high-end housing projects and ongoing data center construction fueled a 23.1-point surge in commercial activity for the construction and real-estate sectors, the CIER said.
Financial services also benefited from stronger investor sentiment, Wang said.
However, retail and hospitality remained in contraction despite a strong NT dollar and reduced outbound travel to Japan.
“The seasonal boost we usually expect has yet to appear,” Wang said, citing subdued tourism demand and lower vehicle sales.
NEW IDENTITY: Known for its software, India has expanded into hardware, with its semiconductor industry growing from US$38bn in 2023 to US$45bn to US$50bn India on Saturday inaugurated its first semiconductor assembly and test facility, a milestone in the government’s push to reduce dependence on foreign chipmakers and stake a claim in a sector dominated by China. Indian Prime Minister Narendra Modi opened US firm Micron Technology Inc’s semiconductor assembly, test and packaging unit in his home state of Gujarat, hailing the “dawn of a new era” for India’s technology ambitions. “When young Indians look back in the future, they will see this decade as the turning point in our tech future,” Modi told the event, which was broadcast on his YouTube channel. The plant would convert
Nanya Technology Corp (南亞科技) yesterday said the DRAM supply crunch could extend through 2028, as the artificial intelligence (AI) boom has led the world’s major memory makers to dramatically reduce production of standard DRAM and allocate a significant portion of their capacity for high-bandwidth memory (HBM) chips. The most severe supply constraints would stretch to the first half of next year due to “very limited” increases in new DRAM capacity worldwide, Nanya Technology president Lee Pei-ing (李培瑛) told a news briefing. The company plans to increase monthly 12-inch wafer capacity to 20,000 in the first half of 2028 after a
Property transactions in the nation’s six special municipalities plunged last month, as a lengthy Lunar New Year holiday combined with ongoing credit tightening dampened housing market activity, data compiled by local land administration offices released on Monday showed. The six cities recorded a total of 10,480 property transfers last month, down 42.5 percent from January and marking the second-lowest monthly level on record, the data showed. “The sharp drop largely reflected seasonal factors and tighter credit conditions,” Evertrust Rehouse Co (永慶房屋) deputy research manager Chen Chin-ping (陳金萍) said. The nine-day Lunar New Year holiday fell in February this year, reducing
New vehicle sales in Taiwan plunged about 37 percent sequentially last month as the long Lunar New Year holiday and 228 Peace Memorial Day holiday cut short the number of working days, along with the lingering uncertainty over import tax cuts on US vehicles, market researcher U-Car said in a report yesterday. New car sales last month totaled 22,043, slumping from 35,073 units in January and down 19.89 percent from 37,515 in February last year, U-Car data showed. Sales of imported luxury cars, led by Mercedes-Benz, plummeted about 45 percent to 3,109 units last month from 5,663 units in the previous month,
RSS