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.
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
RSS