TAIPEI: Taiwan’s industrial production index dropped 3.18 percent annually to 106.71 last month, the first annual decline in the past 15 months, due to weak demand in the semiconductor, computer electronics and optical components industries, the Ministry of Economic Affairs (MOEA) said here the other day.
The index for the electronics component industry saw a 1.79 percent annual decline to 123.74, the first such decline in 36 months, due to reduced demand at foundries because of inventory adjustments, the ministry said.
“The production growth momentum of foundries plunged last month from a double-digit percent growth for nine consecutive months to only 4.7 percent annual growth,” Department of Statistics Deputy Director-General Yang Kuei-hsien told a news conference in Taipei.
Weak demand and rising international competition were behind the drop in production of integrated circuit substrates, flat panels and solar cells, Yang said.
Intense competition in the smartphone industry and slowing economic growth in emerging markets also contributed to the decline in production of handheld devices, optical products, GPS and semiconductor testing equipment, he said.
Production of computer electronics goods and optical components plummeted 20.85 percent, expanding the scale of the decline from April’s 13.37 percent annual decline, Yang said.
The semiconductor industry is expected to continue digesting inventories and the weak growth momentum in emerging markets is likely to extend into this month, so the ministry expects industrial production to decline again on an annual basis this month, he said.
On a monthly basis, the industrial production index might be flat from last month’s 106.71, Yang said, citing the ministry’s monthly survey of local manufacturers.
Separately, the ministry said commercial sales dropped for a third straight month last month, falling 4.3 percent to NT$1.1671 trillion (US$37.58 billion) from a year earlier, because of declining revenues in the wholesale sector.
The wholesale sector, which contributed 68.39 percent of all commercial sales, last month plunged 6.5 percent from last year to NT$798.2 billion, dragged down mainly by the declining demand for PCs, flat panels and fewer purchases from Japan, the ministry said.
Wholesale revenues in the automotive sector saw a 15 percent annual decline because of a higher base last year and a drop in consumer interest in Taiwan-made cars, the ministry said.
This was the first time that wholesale sector revenues have fallen to less than NT$800 billion since May 2013, Yang said.
Sales in the retail sector grew 0.7 percent annually to NT$332.1 billion last month, thanks to summer sales of clothing and the increasing number of brand name stores in the nation, the ministry said.
Restaurant sector revenues rose 4.1 percent to NT$36.8 billion from a year ago, driven by Mother’s Day celebrations and warmer weather spurring strong sales of cold beverages, it said.
Given that demand for the wholesale sector’s information technology goods remains weak, the ministry expects commercial sales to decline from last month’s NT$1.1671 trillion.
