Fixed asset purchases (excluding land) by the manufacturing sector last quarter surged 38.2 percent on an annual basis to NT$339.7 billion (US$10.88 billion), the largest increase since the fourth quarter of 2010, the Ministry of Economic Affairs said yesterday.
In the first half of the year, the sector’s fixed asset purchases increased 33.6 percent to NT$664.2 billion from a year earlier, the ministry said.
Fixed assets include machinery and various types of equipment, buildings and construction projects, as well as furniture, fixtures and vehicles.
The electronic components industry topped other industries last quarter as it purchased NT$211.9 billion in fixed assets, up 53.9 percent year-on-year and comprising 62.4 percent to the sector’s overall purchases.
“Since the first quarter, semiconductor companies have been expanding production capacity while investing in advanced processing technologies,” Department of Statistics Director-General Wang Shu-chuan (王淑娟) said by telephone.
Next was the chemical materials industry, which made fixed-asset purchases of NT$20.1 billion, up 11.4 percent year-on-year as petrochemical firms added new manufacturing plants and expanded production lines.
Similarly, the metal product industry increased its purchases by 79.2 percent to NT$13.5 billion as companies added new machinery to their plants, while local suppliers for the wind power industry continued their investments, the ministry said.
Purchases by the computer, electronic goods and optical components industry increased 7.2 percent to NT$12.2 billion as firms specializing in servers and network communication products rushed to relocate their production facilities back home, Wang said.
However, the machinery equipment industry fell behind as purchases decreased 5.8 percent to NT$9.7 billion due to a high comparison base last year, the ministry said.
Separately, total revenue last quarter brought in by the manufacturing sector (including overseas production) declined 2 percent annually to NT$6.66 trillion, with overall revenue in the first half slipping 2.5 percent to NT$12.91 billion, the ministry said.
The computer, electronic goods and optical components industry presented the only bright spot in the sector as it registered 5.9 percent growth in revenue to NT$2.09 trillion thanks to rushed orders of personal computers, smartphones and consumer electronics on concerns abotu an escalating US-China trade spat.
“We are still witnessing effects from the unresolved trade conflict between the US and China,” Wang said. “We hope that the sector’s revenue situation would turn around by the fourth quarter.”
Wang predicted that local manufacturers’ revenue would increase on an annual basis this quarter as the consumer electronics industry enters its traditional peak season.
“5G is the keyword here; we’re counting on stronger demand as companies deploy related technologies,” she said.