Domestic manufacturers’ investments in fixed assets, excluding land, surged 16.4 percent year-on-year to a record NT$685.1 billion (US$22.5 billion) in the fourth quarter of last year, after flattish growth in the third quarter, the Ministry of Economic Affairs said yesterday.
The ministry attributed the increase to investments by semiconductor companies, which in turn drove companies in their supply chain to also expand production capacity, as well as the launch of major construction projects by state-owned enterprises.
On a quarterly basis, fixed-asset investments increased 21.2 percent from NT$565.3 billion the previous quarter, the ministry said in a report.
Photo: Ritchie B. Tongo, EPA-EFE
For the whole of last year, fixed-asset investments in the manufacturing sector surged 18.1 percent year-on-year to NT$2.27 trillion, also a record, it said.
For the quarter ending December, the electronic components industry led investments in the manufacturing sector at NT$501.3 billion, contributing 73.2 percent to the total, the report said.
That represented growth of 24.4 percent annually, mainly due to wafer foundries’ continuing investments in advanced and mature technologies, coupled with capacity expansion by some passive components makers, to meet the rising demand for 5G devices and automotive electronics, it said.
In contrast, fixed-asset purchases by makers of computer electronics and optical components slid 8.5 percent to NT$15.4 billion mainly due the high comparison base a year earlier, the report said.
The chemical materials industry ranked second, with fixed-asset investments of NT$31.6 billion, up 6.6 percent from a year earlier, as companies expanded factories and production lines to meet higher demand for silicon wafers and related chemicals for semiconductor production, the ministry said.
Some chemical materials suppliers’ transition to green energy, increasing purchases of environmental protection equipment, also helped boost the industry’s fixed-asset investments in the quarter, the report said.
The metal product industry placed third, with fixed-asset purchases of NT$16.9 billion, followed by the petroleum and coal products industry’s NT$14.5 billion, machinery producers’ NT$12.5 billion and base metal industry’s NT$11.8 billion, as they continued to expand capacity and upgrade equipment to meet future demand, it said.
The ministry said it expects the semiconductor industry to continue expanding investments in Taiwan, while offshore wind power developers and returning Taiwanese businesses further contribute to lifting investments.
However, higher inflationary pressure, rising interest rates, Russia’s war in Ukraine, rising tech tensions between China and the US, and global macroeconomic uncertainty are expected to weigh on local manufacturers’ fixed-asset investments, it added.
Meanwhile, revenue from the manufacturing sector — including sales from overseas production — fell 6.1 percent annually to NT$8.68 trillion in the fourth quarter of last year, compared with a 7 percent increase the previous quarter, the report said.
Revenue declined as manufacturers received lower-than-expected orders amid a slowing global economy, which has led to weakening end-market demand and resulted in continued inventory adjustments in the supply chain, the report said.
The quarterly result brought cumulative revenue for last year to a record NT$34.77 trillion, up 6 percent from a year earlier, it said.
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