Industrial production last month rose 16.51 percent year-on-year, a 16th consecutive month of annual growth at a pace that was faster than April’s 14.1 percent rise, as demand in the electrical and traditional sectors remained bullish, the Ministry of Economic Affairs reported yesterday. The output of the manufacturing sector, which makes up more than 90 percent of total industrial production, rose 17.28 percent last month from a year earlier, also marking a 16th straight month of year-on-year growth, the ministry said. On a monthly basis, industrial production rose 4.31 percent, while manufacturing output increased 3.51 percent, it said. Department of Statistics Deputy Director-General Huang Wei-jie (黃偉傑) attributed the performance to increased demand for 5G, high-performance-computing and automotive chips, while demand for information and communications technology (ICT) products stayed strong due to the increase in distance learning and remote working during the COVID-19 pandemic. The output of electronic components last month increased 14.71 percent year-on-year, the 18th month of double-digit percentage growth, ministry data showed. “This is a big engine for growth in manufacturing,” Huang said. Semiconductor suppliers saw production rise 12.59 percent from a year earlier, while production posted by flat-panel makers soared 21.75 percent thanks to the booming stay-at-home economy, he said. The strong stay-at-home economy also increased demand for computers and optoelectronic items, with production rising 10.14 percent from a year earlier, the data showed. Traditional manufacturing — which was hit hard by economic slowdowns following the spread of the virus — “came roaring back,” Huang said. “We are seeing year-on-year growth of more than 20 percent in most categories thanks to a global economic recovery,” he said, adding that last year’s lower comparison base also contributed to the increase last month. The output of chemical material makers last month rose 22.03 percent year-on-year, while base metal makers saw output rise 24.22 percent and machinery
FAST TRACK TO BTA? American Chamber of Commerce in Taiwan president Andrew Wylegala said the ‘stars are aligning for a sharp upgrade’ in US-Taiwan economic ties
The American Chamber of Commerce in Taiwan (AmCham) yesterday proposed a Taiwan commercial initiative (TCI) that would elevate Taiwan-US economic ties to a new level, and possibly lead to a bilateral trade agreement (BTA). The chamber unveiled the plan during a virtual news conference scheduled for the release of its annual position paper, which calls for the initiative and a stable electricity supply, among other demands. The trade group, which has 1,000 members from more than 500 foreign firms, said that the position paper outlines for Washington a six-track strategic approach to the enhancement of Taiwan-US economic and business relations. “The stars are aligning for a sharp upgrade in US-Taiwan economic relations... AmCham is calling for more platforms and more private sector involvement through the TCI,” chamber president Andrew Wylegala said. The first track has been achieved, following an announcement by the two sides that Trade and Investment Framework Agreement council meetings are to resume, the chamber said, adding that it had vigorously pushed for the talks to resume since their suspension four years ago. The TCI calls for an expansion of the Taiwan-US Economic Prosperity Partnership Dialogue initiated by the US Department of State in November last year by encompassing business participation, it said. The TCI urges the Ministry of Economic Affairs and the US Department of Commerce to build transaction-oriented platforms promoting two-way trade and investment, include Taiwan in a multilateral economic agreement and establish a Taiwan-US pact on double taxation, it added. The work streams reinforce each other and pave the way to the ultimate goal: a US-Taiwan trade agreement, it said. The next few years might witness the biggest and most positive transformation in Taiwan’s economic links with the world since the Taiwan Relations Act in the 1970s and its entry into the WTO in the 2000’s, chamber chairman C.W. Chin (金奇偉) said, adding
Taiwan and China are to build more new high-volume semiconductor fabrication plants this year and next year than any other country, together contributing more than half of all new fabs in the world by constructing eight each, SEMI said in a quarterly report yesterday. Global chipmakers are to start building 19 new high-volume fabs by the end of this year and another 10 next year to meet accelerating demand for chips from the communications, computing, healthcare, online services and automotive sectors, SEMI, an association that represents the global semiconductor sector, said in its quarterly report. “Equipment spending for these 29 fabs is expected to surpass US$140 billion over the next few years, as the industry pushes to address the global chip shortage,” SEMI president and chief executive officer Ajit Manocha said. “In the medium and longer term, the fab capacity expansion will help meet projected strong demand for semiconductors stemming from emerging applications such as autonomous vehicles, artificial intelligence, high-performance computing and 5G to 6G communications,” Manocha said. China and Taiwan would lead the way with eight fabs each, followed by the Americas with six, Europe and the Middle East with three combined, and Japan and South Korea with two each, the report said. In Taiwan, chipmakers such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Powerchip Semiconductor Manufacturing Co (力積電) and Vanguard International Semiconductor Corp (世界先進) are investing in new foundry fabs, SEMI said. TSMC has raised its capital spending budget for this year to a record US$30 billion, and Vanguard, which makes driver ICs for displays and power management ICs, also boosted its capital expenditure for this year by 41 percent to NT$8.5 billion, while Powerchip in March started building a new 300mm fab with an initial investment of NT$278 million. Chinese semiconductor firms are investing in fabs that make memory chips, foundry or auto chips,
Industries affected by a semiconductor shortage, from automakers to consumer electronics, might need to wait a little longer for components, as delays in filling orders continue to worsen. Chip lead times, the gap between ordering a semiconductor and taking delivery, last month increased by seven days to 18 weeks from April, an indication that chipmakers’ struggles to keep up with demand are worsening, Susquehanna Financial Group said a report. That gap, the longest wait time since the firm began tracking the data in 2017, is more than four weeks longer than the previous peak in 2018. Power management chips, semiconductors that regulate the flow of electricity in everything from industrial machinery to smartphones, are a primary reason for the overall increase. Lead times for those chips hit 25.6 weeks, nearly two weeks longer than in April. Still, the crunch is widespread. “The broad-based nature of the shortages is highlighted by the data, as most key product categories (power management, discretes, analogs, passives) have seen LT [lead time] expansion,” Susquehanna analyst Chris Rolland wrote. Investors watch lead times looking for clues about how demand is trending, but also as a sign that chip users might be panicking and ordering too much, which would mean the industry is headed for a glut. That point has passed, Rolland said, adding that his concern is that there is not enough demand for the end devices that rely on the electronic components to support current ordering levels. While overall lead times stretched for firms such as Broadcom Inc, NXP Semiconductors NV, STMicroelectronics NV and Texas Instruments Inc, some areas are beginning to catch up with demand. Lead times for microcontrollers, small processors that direct functions in everything from vehicles to washing machines, decreased by more than one week, Rolland said. Lead times for analog chips, devices that convert real-world phenomena such as touch and sound into
The central bank yesterday raised the cap on special loans to small business owners from NT$500,000 to NT$1 million (US$17,853 to US$35,707) to help them with cash flow problems induced by the local COVID-19 outbreak. The policy is to be implemented today due to growing demand for loans from small business owners, the bank said in a statement. The move came three weeks after the central bank expanded the lending program by NT$100 billion to NT$400 billion. “Small businesses are badly in need of cash injections as consumer activity has dwindled amid tight movement restrictions to combat the virus outbreak,” the central bank said. Business owners can file multiple loan applications as long as the total amount does not exceed the new ceiling, the central bank said, adding that it is mostly the same type of businesses that struggled last year. Traditional lenders have shunned small business owners, because their modest operations render them vulnerable to external shocks. Small and Medium Enterprise Credit Guarantee Fund of Taiwan (信保基金) has agreed to underwrite the lending program 100 percent. As of Monday, participating lenders had processed 131,200 loan requests totaling NT$62.37 billion, the central bank said. The central bank said it would closely monitor the situation to see whether further adjustments are necessary. It urged lenders to support small business owners in difficult times as part of their corporate social responsibility.
A woman buys food at a restaurant near the Ximending shopping area in Taipei yesterday as others wait for takeout. The government yesterday extended a nationwide level 3 COVID-19 alert to July 12. The alert requires restaurants to offer only takeout and delivery service.
TECH FOCUS: The electronics sector drove gains on the broader market, but the transportation sector tumbled 8.49 percent, and the steel sector declined 2.61 percent
Shares in Taiwan yesterday rose sharply as fears over near-term interest rate hikes in the US subsided following testimony by US Federal Reserve Chair Jerome Powell at a congressional hearing. Powell said that while there is inflation in the US, most of the increase in prices was temporary, a view that helped push the tech-heavy NASDAQ to an all-time high and enabled the bellwether electronics sector to lead the upturn in Taipei trading, an analyst said. “Powell’s comments did ease concerns over a possible rate hike cycle, so investors at home and abroad became more willing to pick up bargains after recent heavy losses,” Cathay Futures Consultant Co (國泰證期顧問) analyst Tsai Ming-han (蔡明翰) said. Before yesterday’s surge, the TAIEX fell 1.48 percent on Monday on rate hike fears and rose only 0.07 percent on Tuesday. “The electronics sector made a comeback and drove the gains on the broader market as investors reacted to the NASDAQ rally,” Tsai said. “In addition to the semiconductor industry, many other electronics component stocks also steamed ahead, benefiting the broader market.” The TAIEX yesterday closed up 261.16 points, or 1.53 percent, at 17,336.71, on turnover of NT$524.793 billion (US$18.74 billion), Taiwan Stock Exchange data showed. Foreign institutional investors bought a net NT$10.96 billion in shares. Contract chipmakers Taiwan Semiconductor Manufacturing Co (台積電) and United Microelectronics Corp (聯電) rose 2.95 percent and 3.92 percent respectively, while smartphone IC designer MediaTek Inc (聯發科) increased 4.21 percent and IC packaging and testing services provider ASE Technology Holding Co (日月光投控) gained 2.65 percent. “Despite a high-flying TAIEX, old-economy stocks appeared mixed, as shipping and select raw material stocks faced profit-taking as buying concentrated on the electronics sector,” Tsai said. The transportation sector plunged 8.49 percent, with shipping firms Evergreen Marine Corp (長榮海運), Yang Ming Marine Transport Corp (陽明海運) and Wan Hai Lines
Hon Hai Precision Industry Co (鴻海精密) yesterday signed a memorandum of understanding (MOU) with Gogoro Inc (睿能創意) to help accelerate the electric scooter maker’s global expansion. The move followed announcements by Gogoro that it is extending its reach to India and China. “This partnership brings together Gogoro’s global leadership in urban battery-swapping and smart vehicle technologies with Hon Hai’s extensive global manufacturing capabilities to enable mass distribution of Gogoro’s smart battery-swapping ecosystem and vehicles,” Hon Hai chairman Young Liu (劉揚偉) said in a news release. While Gogoro continues to focus on product design, technology development, marketing, branding and customer service, Hon Hai said that it could take manufacturing off Gogoro’s plate. “Right now Gogoro handles everything from manufacturing to marketing here in Taiwan, but it will be difficult for them to ramp up manufacturing abroad. Hon Hai already has manufacturing facilities in India and China, Gogoro’s next destinations,” the release said. “The scooters, batteries and battery swap stations could all be handled by Hon Hai’s manufacturing facilities,” it added. The two firms did not reveal other details of the collaboration. Founded in 2011, Gogoro makes electric scooters. Today, nearly 400,000 Gogoro riders can swap batteries at 2,100 stations in Taiwan. Prior to the announcement of its partnership with Hon Hai, Gogoro was already designing and manufacturing electric scooters for other firms — Yamaha Motor Co, Aeon Motor Co (宏佳騰), Motive Power Industry Co (摩特動力) and Suzuki Motor Corp — under the Powered by Gogoro network model, in addition to its own scooters. In April, Gogoro announced a strategic partnership with Indian scooter maker Hero MotoCorp Ltd to collaborate on Hero branded vehicles using the Powered by Gogoro network model.
Egyptian officials and owners of the Ever Given vessel that blocked the Suez Canal earlier this year have reached a preliminary deal over compensation, legal representatives said. “Following extensive discussions with the Suez Canal Authority’s negotiating committee over the past few weeks, an agreement in principle between the parties has been reached,” Stann Marine Ltd, a London-based law firm for the Ever Given’s owners and insurers, said in a statement on Monday. The two sides would finalize an agreement “as soon as possible,” after which arrangements would be made to let the ship leave Egypt, Stann said. The statement did not disclose any financial details. The 400m-long Ever Given, one of the world’s largest container vessels, ran aground in the southern part of the canal in late March, blocking it for six days and roiling shipping markets. The Suez Canal Authority originally demanded more than US$900 million to cover the loss of transit fees, damage to the waterway during salvage efforts, and the cost of equipment and labor. It reduced the amount to about US$550 million. Japan’s Shoei Kisen Kaisha Ltd, the owner, and the ship’s insurers initially offered US$150 million. Taiwan’s Evergreen Marine Corp (長榮海運) had chartered the vessel, which was traveling from China to Rotterdam. After being freed on March 29, the Ever Given was sailed to the Great Bitter Lake and has since been kept there by Egyptian authorities.
Boxes of peaches are displayed at Wuling Farm in Taichung County yesterday. In the past, the seasonal fruit grown at the farm was only sold to tourists, but as the farm is closed amid a level 3 COVID-19 alert, it is selling the fruit online. Sales are going well as it received orders for about 1,500 boxes of peaches in just 10 days.
FINANCE Shinhan bonds listed locally South Korean credit card company Shinhan Card Co Ltd’s international bonds were yesterday listed on the Taipei Exchange, making it the first foreign financial institution to issue international bonds in Taiwan. The US$300 million of bonds, with maturities of five years and a coupon rate of 1.375 percent, have a dual listing in Taipei and Singapore, and the lead underwriter of the bond is HSBC Bank Taiwan Ltd (匯豐台灣商銀), the exchange said. The funds raised are to be used exclusively for social projects focusing on financing for the development of public hospitals and medical facilities, loans to low-income populations with low credit ratings, subsidizing the borrowing of loans for infrastructure and transportation projects, and supporting interest payments, it said. BROKERAGES Combined profit declines Securities firms in Taiwan last month reported combined net income of NT$4.76 billion (US$169.96 million), down 64.14 percent from April, the Taiwan Stock Exchange said in a statement on Tuesday. The exchange attributed last month’s drop to a 163.72 percent decline in dealer trading profit and a 79.64 percent fall in underwriting profit, compared with April, although securities firms saw an increase of 31 percent in brokerage fee income. Securities firms’ accumulated net income in the first five months of the year totaled NT$44.89 billion, up 480.34 percent from the same period last year, the exchange said. The significant rise in brokerage fee income, dealer trading profit and underwriting profit came as the TAIEX reversed its downward momentum, it added. AIRLINES Air NZ to restart local flights Air New Zealand is to resume direct passenger flights between Taiwan Taoyuan International Airport and Auckland Airport in August after a 16-month hiatus, the airline said in a news release yesterday. Starting on Aug. 4, the airline plans to operate one round-trip flight per month between Taipei and Auckland, it said,
TENSIONS: The bank had announced changes to its terms from July 26, saying that customers might not be able to use online or mobile banking outside of Hong Kong
HSBC Holdings PLC apologized to customers in Hong Kong after an update to its online and mobile banking terms stoked fears over overseas access to its services in the territory. The quick mea culpa by Hong Kong’s biggest bank — triggered by a Twitter post — underscores growing concerns in the territory over not only civil society, but also pressures on businesses as China tightens its grip. Banks are trying to navigate an increasingly fraught political environment. The Hong Kong government last week used them as a hammer to shutter the territory’s premier pro-democracy newspaper, the Apple Daily, ordering seven lenders against dealing with the company. The banks involved have not been identified. Access to funds in Hong Kong is becoming a sensitive topic, with thousands of Hong Kongers leaving for the UK and other places as freedoms are restricted. Against that backdrop, Hong Kongers were spooked after a Twitter post on Tuesday shared a link to updated online and mobile banking terms on HSBC’s Web site. The bank announced changes to its terms from July 26, saying that customers might not be able to use online or mobile banking outside of Hong Kong. The incident was widely reported by major local newspapers, including the Chinese-language Ming Pao, Sing Tao Daily and the Hong Kong Economic Times. On LIHKG, one of Hong Kong’s largest online forums, a post on HSBC has more than 800 comments since late on Tuesday, with some people saying that they would transfer funds to other banks. HSBC was quick to reassure customers that there were no changes and that it only had combined terms for its Internet banking, mobile app and mobile security key into one document. “HSBC Hong Kong customers can continue to access banking services through Online Banking and Mobile Banking outside of Hong Kong SAR [Special Administrative Region],” a spokeswoman said. “There is
CAUSING HARM? US Federal Reserve Chairman Jerome Powell said that prices rose in categories such as used cars, where demand soared as the economy quickly reopened
US Federal Reserve Chairman Jerome Powell on Tuesday responded to concerns from US Republican lawmakers about spiking inflation by reiterating his view that current price increases are likely to prove temporary. Consumer prices last month jumped 5 percent from a year earlier, the largest increase in 13 years. Republican members of the US House of Representatives have sought to blame higher inflation on US President Joe Biden’s US$1.9 trillion economic relief package, approved in March, in an effort to retake the House next year. “The Biden inflation agenda of too much money chasing too few goods is causing major harm to hardworking families,” said US Representative Steve Scalise, the second-ranking Republican leader in the House. Powell avoided participating in policy debates, despite attempts by Democratic and Republican lawmakers to draw him in. However, he said in testimony before a congressional oversight panel that price gains mostly reflected temporary supply bottlenecks, and the comparison basis from last spring, the onset of the pandemic when prices sharply fell, makes current prices appear much higher. Most of the price gains have occurred in categories such as used vehicles, airplane tickets and hotel rooms, Powell said, where demand has soared as the economy has quickly reopened, catching many companies flat-footed. “Those are things that we would look to, to stop going up and ultimately to start to decline as these situations resolve themselves,” Powell said. “They don’t speak to a broadly tight economy — the kind of thing that has led to high inflation over time.” “These effects have been larger than we expected and they may turn out to be more persistent than we expected,” he said. However, the “incoming data are very much consistent with the view that these are factors that will wane over time and then inflation will then move down toward our goals,” he added. Powell did not specify
Eurozone business growth this month accelerated at its fastest pace in 15 years as the easing of more lockdown measures and the unleashing of pent-up demand drove a boom in the bloc’s dominant services industry, a survey showed. When COVID-19 was rapidly spreading, governments imposed strict restrictions, encouraging citizens to stay home and forcing much of the service industry to close. However, after a slow start, the region’s vaccination drive is picking up pace and the burden on health services has eased, allowing some restrictions placed on services firms — which were already adapting to new operating conditions — to be lifted. That led to a jump in IHS Markit’s flash composite purchasing managers’ index (PMI) — seen as a good guide to economic health — to 59.2 from 57.1, its highest reading since June 2006. The figure was higher than the 50 mark separating growth from contraction and a Reuters poll estimate of 58.8. “The eurozone economy is booming at a pace not seen for 15 years as businesses report surging demand, with the upturn becoming increasingly broad-based, spreading from manufacturing to encompass more service sectors, especially consumer-facing firms,” IHS Markit head business economist Chris Williamson said. A flash services PMI bounced to 58.0 from 55.2, its highest since January 2018 and just above the 57.8 Reuters poll prediction. Suggesting that momentum is likely to continue, the new business index climbed to a near 14-year high of 57.7 from 56.6. The expansion in manufacturing activity matched last month’s blistering record pace, with the flash PMI estimate for this month matching last month’s final reading of 63.1, confounding the Reuters poll estimate for a dip to 62.1. An index measuring output, which feeds into the composite PMI, nudged up to 62.4 from 62.2. However, supply-side disruptions and huge demand have made it a sellers’ market for the raw materials that
A Swedish court on Tuesday struck down a plea from Chinese telecoms giant Huawei Technologies Co (華為), which challenged the banning of its equipment in the Swedish tender for its 5G rollout. The administrative court in Stockholm ruled that the decision of the Swedish telecoms authority, PTS, in October last year to ban the use of equipment from Chinese companies Huawei and ZTE Corp (中興) in a new Swedish 5G telecom network — a move that irked Beijing — was legal. Installed equipment must be removed by Jan. 1, 2025. “Sweden’s security is an important reason and the administrative court has considered that it’s only the security police and the military that together have a full picture when it comes to the security situation and threats against Sweden,” Judge Ulrika Melin said in a statement. Huawei denounced the ruling, but did not say whether it would appeal. “We are of course noting that there has been no evidence of any wrongdoings by Huawei which is being used as basis for this verdict, it is purely based on assumption,” said Kenneth Fredriksen, Huawei’s vice president for central and eastern Europe, and the Nordic region. Huawei would evaluate the decision and “see what kind of actions we will take to protect our rights,” Fredriksen added. Following action by the UK in the summer of last year, Sweden became the second country in Europe and the first in the EU to explicitly ban Huawei from almost all of the network infrastructure needed to run its 5G network. Beijing had said that PTS’ decision could have “consequences” for the Scandinavian country’s companies in China, prompting Swedish telecom giant and Huawei competitor Ericsson AB to worry about retaliation. “We will continue to be available to have constructive dialogues with Swedish authorities to see if we can find pragmatic ways of taking care of security,
Global electric-vehicle (EV) supremacy is expected to arrive by 2033 — five years earlier than previously forecast — as tougher regulations and rising interest drive demand for zero-emission transportation, a new study found. Consultant Ernst & Young LLP sees EV sales outpacing fossil-fuel burners in 12 years in Europe, China and the US — the world’s largest auto markets. By 2045, non-EV sales are seen plummeting to less than 1 percent of the global vehicle market, Ernst & Young forecast, using a prediction tool powered by artificial intelligence. Strict government mandates to combat climate change are driving demand in Europe and China, where automakers and consumers face rising financial penalties for selling and buying traditional gasoline and diesel-powered vehicles. Ernst & Young sees Europe leading the charge to electric, with zero-emission models outselling all other propulsion systems by 2028. That tipping point is expected to arrive in China in 2033 and in the US in 2036, Ernst & Young said. The US lags the world’s other leading markets because fuel-economy regulations were eased during former US president Donald Trump’s administration. Since taking office in January, US President Joe Biden has rejoined the Paris Climate Accord and proposed spending US$174 billion to accelerate the shift to EVs, including installing 500,000 charging stations across the country. “The regulatory environment from the Biden administration we view as a big contributor, because he has ambitious targets,” Ernst & Young global advanced manufacturing and mobility leader Randy Miller said in an interview. “That impact in the Americas will have a supercharging effect.” There also is a growing consumer appetite for EVs, from Tesla Inc’s hot-selling Model 3 to new electric models coming from legacy automakers, such as General Motors Co’s battery-powered Hummer truck and Ford Motor Co’s F-150 Lightning pickup. Investments in battery-powered models total US$230 billion from the world’s automakers, consultant AlixPartners said. “Many more
JAPAN Output rises for fifth month Manufacturing activity this month expanded for a fifth consecutive month, while services continued to shrink amid measures to contain COVID-19. The au Jibun Bank’s purchasing managers index (PMI) for activity in the manufacturing sector fell 1.5 points to 51.5, while its measure of service sector activity gained 0.7 points to 47.2. Numbers above 50 indicate an expansion, while those below signal a contraction. Despite this month’s improvement, the services PMI has shown shrinking activity every month since February last year. SINGAPORE Rich to soar 60% by 2025 The city-state’s count of millionaires could increase by more than 60 percent over the five years from last year to 2025, Credit Suisse Group AG said, part of a surge in millionaires expected in Asia as financial capitals emerge from the COVID-19 pandemic. The city-state might have 437,000 millionaires by 2025, up from 270,000 last year, the bank’s 2021 Global Wealth Report said. The 62 percent pace would be faster than Hong Kong’s estimated 60 percent for the same period, but slower than the growth forecast in Taiwan, Australia, China, India and South Korea. ITALY PM eyes long-lasting growth The country needs an EU-wide expansionary fiscal policy to achieve long-lasting growth after the COVID-19 pandemic, Prime Minister Mario Draghi told the lower house of parliament yesterday ahead of an EU leaders meeting. “Our aim is to overcome in a long-lasting and sustainable way the low growth rates Italy reported before the pandemic,” Draghi told the Chamber of Deputies. As his government is lifting most of the curbs imposed to contain COVID-19 infections, Draghi said that the spread of new, dangerous variants has to be carefully monitored. “They could slow down the reopening program, and hamper internal demand and investments,” he said. SWEDEN GDP growth revised upward The country’s economy this year is to grow substantially
QUICK CHANGE: After a prolonged drought, the Water Resources Agency said it is preparing for potential floods from intense rainfall this week
The Ministry of Economic Affairs yesterday announced that it was easing water restrictions in several regions, thanks to rainfall over the past few days. The water supply alert level has been downgraded from “orange” to “yellow” for Taoyuan and Hsinchu and Miaoli counties, and from “orange” to “green” for Tainan and Chiayi County, the ministry said. Only Taichung remains under “orange” alert, with round-the-clock decreased water pressure, it said. A combination of water management measures and considerable plum rains and tropical showers has seen reservoirs significantly replenished across the nation, Minister of Economic Affairs Wang Mei-hua (王美花) said. Just weeks ago water levels at local reservoirs were below 10 percent, as the nation faced the worst drought in a generation. However, the turnaround has been quick, with the water level at the Shihmen Reservoir (石門水庫) in Taoyuan rising from a low of 9 percent to 55 percent, the ministry said. Hsinchu’s Baoshan Reservoir (寶山水庫) and Baoshan Second Reservoir (寶二水庫), which serve the Hsinchu Science Park, also saw water levels rise from 3 percent to 77 percent, while the Nanhua Reservoir (南化水庫) increased from 8 percent to 100 percent, it said. “We expect another wave of plum rain this week to fully replenish the Hushan Reservoir (湖山水庫), Sun Moon Lake (日月潭) and the two Baoshan reservoirs,” Wang said. “However, Taichung’s Liyutan Reservoir (鯉魚潭水庫) and the Techi Reservoir (德基水庫) are still lower than ideal at 47 percent and 26 percent respectively, meaning we have to keep Taichung under ‘orange’ alert for now.” The drought had ruined the first-season rice crop for most farmers due to a lack of irrigation. The Water Resources Agency is working with the Council of Agriculture to expedite irrigation for the second-season rice crop “wherever possible” and plans to prioritize using water from ponds, rivers and other sources to begin limited irrigation, agency
Major PC vendors expect a shortage of key components to last another 12 months until the second quarter of next year, when PC demand wanes after two years of robust expansion, a UBS analyst said yesterday. Concern has risen among investors that PC demand could weaken as the US and European economies reopen from COVID-19 lockdowns and gradually return to in-person business activities. At the annual Taiwan Conference that began on Monday, UBS analysts said they had similar discussions with companies in PC supply chains, and the feedback from major PC vendors indicated that demand remained quite strong on the back of slim inventories of two to three weeks, compared with the normal six to eight weeks. PC supply still lagged consumer demand, with a gap of 20 to 30 percent, UBS head of Taiwan hardware industry Grace Chen (陳星嘉) told a virtual media briefing. Key component supply constraints remain the choke point, she added. “For PCs, the component shortage is mainly IC related, like driver ICs and power management ICs. The panel shortage is not very serious now,” Chen said in an e-mail to the Taipei Times She expects global PC shipments to continue growing at a double-digit percentage sequentially this quarter and next quarter before decelerating in the second half of this year. For the full year, global PC shipments are forecast to grow between 10 and 20 percent annually, Chen said, adding that growth would be slower next year. As major PC vendors unanimously expect key component supply constraints to start easing in the second quarter next year, PC supply and demand could reach a parity by then, she said. Aside from the PC industry, electric vehicles might be a new growth driver for local hardware manufacturers, Chen said. The production value of electric vehicles, which consume many more chips and electronic components than conventional
The TAIEX would hover at about 17,470 points at the end of this year, with the weighted index witnessing more volatility in the third quarter due to uncertainty over the US’ monetary policy, UBS Securities Pte Ltd, Taipei Branch said yesterday. The TAIEX yesterday closed up 0.07 percent at 17,075.55 points, down 3 percent from a record high of 17,595 points on April 27, but up 16 percent year to date, Taiwan Stock Exchange data showed. The benchmark index is likely to remain at this high level at the end of the year, despite a spate of COVID-19 infections, as solid corporate revenues and exports should support the index, UBS analyst Ally Chen (陳玟瑾) told a videoconference. “For those companies we cover, we estimate their combined profits would grow more than 30 percent this year from last year,” she said. Although the TAIEX fell after COVID-19 cases surged last month, it has quickly recovered, she added. However, “huge volatility” in Taiwanese equities is also possible next quarter, as local stocks would be affected once the US Federal Reserve announces new liquidity-tightening measures, she said. In 2013, when the Fed announced that it was ending its bond-buying program, which it began in 2008 in response to the financial crisis, the news took a toll on local stocks, Chen said. However, by the time the Fed started reducing its purchases in 2014, local stocks had regained their momentum due to solid fundamentals, she said. “Therefore, we might see a similar impact on the TAIEX next quarter, and we suggest investors avoid overpriced stocks that are less resilient to a tighter monetary policy,” Chen said. Investors are also advised to monitor several key gauges, including corporate revenues, growth in demand for end products from the US and Europe after COVID-19 lockdown measures end and inflation’s effect on corporate earnings, she said. Asked