Japan yesterday reported that its economy contracted at an annual rate of 2.2 percent in the January-to-March period, less than initially estimated.
The update from the Japanese Cabinet Office was an improvement on the 3.4 percent contraction reported earlier.
It said that private sector demand had not dropped as much as previously estimated.
The revision was not surprising and a recovery is expected as countries reopen after their COVID-19 shutdowns, analysts said.
The annual rate is the projected number if the same level of growth or contraction in that quarter lasted for a whole year. The quarter-on-quarter drop was 0.6 percent for real GDP.
The earlier quarter-on-quarter growth estimate was minus-0.9 percent.
Japan’s economy, the world’s third largest, has been stagnant for years and was in trouble even before the pandemic hit consumer spending and other main drivers of growth.
The country also imposed only limited shutdowns to fight the novel coronavirus, leaving less room for a rebound than in some other countries.
SMBC Nikko Securities Inc chief market economist Yoshimasa Maruyama said that the upward revision was not surprising.
Given the reopening of economies worldwide a recovery is likely, helped by pent-up demand.
“The Japanese economy will rebound very quickly, but after that, it will again falter and stall,” Maruyama said, as other problems would not disappear even if the fallout from COVID-19 could be brought under control.
A sales tax hike in October last year depressed consumer spending, a major factor behind a 7.2 percent contraction in the final quarter of the year, even before the pandemic hit.
Growth was flat in the quarter before that through September.
Japanese government has ramped up spending and rolled out an unprecedented amount of stimulus to help businesses and consumers weather the crisis.
The unemployment rate has been rising slightly and was at 2.6 percent in April, but joblessness has not shot up in Japan, as it has in the US or other nations where layoffs are more common. Japan also has long had a labor shortage problem.
EXPECTATIONS: The firm, which is on track to outpace global foundry industry revenue growth, said it expects constrained advanced process capacity amid stronger AI demand Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday increased its projected revenue growth for this year to above 25 percent, as stronger-than-expected demand for premium smartphones and artificial intelligence (AI) devices are to drive greater utilization of cutting-edge 3-nanometer and 5-nanometer chips. In April TSMC estimated 21 to 24 percent annual growth. The firm’s revenue growth is on track to greatly outpace the global foundry industry, which is expected to rise about 10 percent this year. “Over the past three months, we have observed stronger AI and high-end smartphone demand from our customers, which is to boost the overall capacity utilization for our leading-edge
INVESTMENT: The company’s planned complex in Texas would be the first 12-inch silicon wafer fab built in the US in more than 20 years, a GlobalWafers official said GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said it secured up to US$400 million in direct funding from the US Department of Commerce under the CHIPS and Science Act for the construction of two new advanced fabs in the US. Its subsidiaries GlobalWafers America and MEMC LLC are to build a 12-inch silicon wafer fab in Sherman, Texas, and another one in Missouri to produce silicon-on-insulator (SOI) wafers used to make leading-edge chips. “With the support of the [US President Joe] Biden Administration, we are honored to be bringing to American shores the world’s most cutting-edge 12-inch semiconductor
Powerchip Semiconductor Manufacturing Co (力積電) yesterday said that net losses ballooned to NT$1.96 billion (US$60.1 million) in the second quarter, as heavy manufacturing costs from a new fab outweighed the improvement in customer demand and factory utilization. That compared with losses of NT$439 million in the first quarter. The company posted a net profit of NT$617 million a year earlier. Gross margin plummeted to 5.3 percent last quarter, from 15.4 percent in the previous quarter and 16.8 percent in the same period last year. It was the weakest since the fourth quarter of last year. The chipmaker blamed heavy depreciation and higher manufacturing
Nikon Corp is fielding strong demand for its legacy chipmaking machines in China, which is mobilizing resources to build its own semiconductor supply chain. Inquiries for the Japanese precision maker’s lithography tools have surged in China, Nikon president Muneaki Tokunari said. The company is set to revamp a lithography machine geared for decades-old manufacturing processes. Its NSR-2205iL1, launching this summer, would serve the market for mature chip technology and Nikon expects to sell more than 10 units of the machine annually, said Tokunari, who is also chief operating officer and chief financial officer. New companies are sprouting up in China to make