The official manufacturing purchasing managers’ index (PMI) last month shed 4.5 points to 42.8, dragged by conspicuous declines in new business orders and industrial production, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
“Taiwanese manufacturers turned conservative after major chipmakers last month gave weak earnings guidances for this quarter and beyond, while global economic uncertainty shows no signs of easing,” CIER president Yeh Chun-hsien (葉俊顯) told a news conference in Taipei.
Yeh specifically referred to Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest advanced chipmaker, which said on April 20 that inventory adjustments were worse and taking longer than expected due to poor demand for personal computers and smartphones.
Photo: Hsu Tzu-ling, Taipei Times
At the same time, the benefits of China’s reopening are not yet evident, strikes in Europe could slow the pace of recovery and the US Federal Reserve might raise interest rates again this week to tame inflation — all of which would be unfavorable for Taiwan exports, Yeh said.
“The backdrop lends support to a frugal approach in dealing with purchasing activity,” Yeh said.
PMI data aim to measure the health of the manufacturing industry with values of 50 or higher suggesting expansion and scores lower than the threshold indicating contraction.
Most sectors reported a downturn in business last month, except for suppliers of food, textile and raw material products, CIER said, citing a monthly survey of local firms.
The critical subindex on new business orders dropped 3.9 points to 40.6, while the reading for industrial production tumbled 13.5 points to 38.5, as poor sales prompted firms to cut capacity and staff numbers to save on operating costs, the Taipei-based think tank said.
Electronics makers held relatively firm, but vendors of electrical and machinery equipment, and transportation tools fell into contraction, CIER said.
The inventory subindex declined 4 points to 45.9, while the reading for clients’ inventory dropped 2.1 points to 44.9, as firms would rather tighten their belts than replenish inventory, it said.
Tepid demand helped ease raw material prices, with the price measure retreating 4.5 points to 52, CIER said.
Firms in almost all of the manufacturing sectors held a negative view regarding their business prospects, explaining why the six-month outlook dropped 1.3 points to 44.9, it said.
Purchasing activity at service providers gained further momentum, tipping the nonmanufacturing index up by 2.6 points to 55.8, although wholesale operators bucked the trend, the think tank said.
Nonmanufacturing businesses are divided about their business outlook: Hospitality operators, retailers and transportation service providers are upbeat, but property brokers and financial companies expect a soft patch ahead, CIER said.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday obtained the government’s approval to inject an additional US$10.26 billion to finance the construction of its second fab in Kumamoto, Japan, and a second fab in Arizona, using advanced process technologies. The Department of Investment Review approved TSMC’s investment applications on the basis that Taiwan remains a major technology and manufacturing hub for the chipmaker, which makes its most advanced chips at home, the company operates its research-and-development center here and the majority of its capacity remains in Taiwan. The latest capital injections — US$5.26 billion for its Japanese venture Japan Advanced Semiconductor Manufacturing
DIVERSIFYING: Following customers’ demand to improve supply chain resilience, ASE is looking for sites in the US, Japan and Mexico, a company executive said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it plans to launch a new high-end chip testing fab in the US next month to better serve its key customers based in North America, particularly California-based artificial intelligence (AI) customers. The new US testing facility would be operated by the firm’s subsidiary ISE Labs Inc, it said. ASE’s major customers, and high-ranking US officials and representatives from American Institute in Taiwan are to attend the fab’s opening ceremony on July 12, it said. ISE Labs last year acquired a 5,942m2 facility in San
Local companies believe that nearly a third of all job opportunities will vanish in 10 years due to the rise of artificial intelligence (AI), according to a survey released by online job bank yes123 on Tuesday. In the survey of 1,016 companies on the labor market’s third quarter outlook, the job bank focused in part on AI’s impact on workers and asked companies what percentage of jobs they felt would be lost to AI’s round-the-clock productivity and high-speed computing prowess. Respondents felt on average that 29.2 percent of job opportunities would be lost to AI over the next 10 years, but there
Taiwanese workers earned an average of NT$47,000 per month this year, but 40 percent are struggling financially and 18 percent plan to switch jobs within 12 months, two separate surveys showed yesterday. The amount equals a 5.4 percent increase from a year earlier to a decade high, 104 Job Bank (104人力銀行) said. The government is due to review the nation’s minimum wages. Employees at computer and consumer electronics manufacturers reported the highest average monthly wage of NT$60,000 a month, followed by semiconductor firms at NT$59,000, and vendors of shoe and textile products, along with software and Internet businesses at NT$55,000, 104 Job