The production value of the automobile and parts industry in the second quarter fell 8.32 percent year-on-year to NT$112 billion (US$3.7 billion) as the Taiwan-US trade talks over the tariffs issue heavily weighed on the local car market, the Ministry of Economic Affairs said in a report on Tuesday.
“The auto market is cautious, and consumers are taking a wait-and-see attitude ahead of the outcome of trade negotiations, causing demand to slow down, while some automakers have suspended or reduced production due to equipment upgrades, resulting in a significant decrease in the output value of fuel-powered cars and trucks,” the report said.
“In addition, the order momentum for automotive electrical appliances, automotive lighting units and other parts has weakened,” it said.
Photo: CNA
Two other traditional industries also posted output decreases in the April-to-June quarter, with the chemical materials and fertilizers industry declining 20.26 percent to NT$339.9 billion and the base metals industry down 12.99 percent to NT$355 billion, the report said.
The traditional industries were affected by factors such as the uncertainty of the international economic and trade situation, while some manufacturers reducing production for equipment maintenance also played a role, the ministry said.
In contrast, the electronic components industry posted an annual increase of 25.62 percent in production value to NT$1.91 trillion, led by a 29.24 percent rise in semiconductor output, on strong demand of artificial intelligence (AI) and high-performance computing (HPC) applications, the report said.
The computer and optical products industry also registered 72.95 percent growth in production value to NT$707.8 billion due to robust demand for AI and cloud-based data services, it said.
Meanwhile, the machinery equipment industry posted an output increase of 3.86 percent to NT$237.9 billion, as the semiconductor industry’s active expansion of advanced process production drove demand for semiconductor equipment, machinery components and automated warehousing equipment, it said.
Overall, Taiwan’s manufacturing output in the second quarter rose 11.14 percent year-on-year to NT$5.35 trillion, the sixth consecutive quarter of annual growth, the ministry said.
The outlook for the manufacturing sector remains positive, the ministry said, citing strong demand for emerging technologies such as AI, HPC and cloud-based data services; Taiwan’s leading edge in advanced semiconductor manufacturing processes and its comprehensive supply chain for high-end servers; and the anticipated launches of new consumer electronics in the second half of the year.
However, negative factors such as international trade measures and geopolitical conflicts are expected to disrupt the pace of global economic growth and pose uncertainties for Taiwan’s export-reliant manufacturing sector, it said.
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