The nation’s energy consumption last month shrank 5.81 percent from a year earlier, in line with a softening economy, Taiwan Research Institute (台灣綜合研究院) said yesterday, expecting the situation to persist in the coming months as manufacturers contend with inventory correction.
The electricity prosperity index (EPI), which the New Taipei City-based institute uses to gauge the health of the industrial and service sectors, showed that the fall in power consumption deepened as local manufacturers remained mired in sluggish global demand for goods and services.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, last week gave a conservative guidance for this quarter, with revenue expected to drop 14 percent from three months earlier due to an inventory glut.
Photo: Lin Jin-hua, Taipei Times
Similar reasons would weaken the top line of United Microelectronics Corp (聯電) by 17 to 19 percent and its capacity from 90 percent to 70 percent, the firm told an investors’ conference on Monday.
High-voltage electricity usage last month contracted 4.86 percent for the industrial sector and 2.94 percent for service providers, as manufacturers bore the brunt of an ongoing economic slowdown induced by global inflation and monetary tightening, the institute said.
GDP last month likely eked out a fractional 0.7 percent growth and rose 1.3 percent during the final quarter of last year, the institute said, predicting a 2.8 percent expansion for the full year.
That is lower than the projection of the Directorate-General of Budget, Accounting and Statistics, which is to release its latest GDP estimates for the fourth quarter. The announcement would come earlier than its normal schedule, because of the forthcoming Lunar New Year holiday. The statistics agency in November forecast that GDP would increase 1.52 percent in the final quarter.
The inventory adjustments have proved worse than expected based on the EPI movements, the institute said, depicting the manufacturing industry in a recessionary state.
Semiconductor firms supported the EPI readings in the first half of last year, but took a back seat as fast-recovering service providers were the catalysts in the second half, the institute said.
Recession fears are building up, as central banks in the US and Europe gear up for further interest rate hikes to tame inflation, it said, adding that the continuing war in Ukraine poses another downside risk.
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