Manufacturing sector's fixed asset investments hit Q2 high

09/17/2022 07:41 PM
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CNA file photo
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Taipei, Sept. 17 (CNA) With many semiconductor suppliers keen to expand production, the local manufacturing sector reported its highest-ever second-quarter fixed asset investment results, according to the Ministry of Economic Affairs.

In terms of revenue, the sector also reported the highest level for the second quarter due to solid global demand for tech gadgets, the MOEA said.

Data compiled by the Department of Statistics under the MOEA showed investments from manufacturers in Taiwan for the second quarter of this year totaled NT$539.7 billion (US$17.24 billion), up 25.8 percent from a year earlier and also up 11.6 percent from a quarter earlier.

According to the MOEA, fixed assets owned by the manufacturing sector include machinery and other production equipment, factories, and transportation equipment, but exclude land purchases.

The MOEA said that Taiwan's major semiconductor producers had poured funds into fixed assets between April and June in an effort to maintain their lead in the high-end processes market and meet solid demand for emerging technologies, such as 5G applications, high-performance computing devices, and automotive electronics.

The MOEA added that memory chip and printed circuit board suppliers pushed their fixed asset investments in earnest during the same period.

As for individual industries, the electronics component industry invested NT$387.3 billion in fixed assets in the second quarter, up 35.9 percent from a year earlier and up 9.1 percent from a quarter earlier, the MOEA said.

The industry accounted for 71.8 percent of the total fixed asset investments by the manufacturing sector in the second quarter as semiconductor suppliers served as the major investors, the MOEA added.

The chemical material sector came in second after investing NT$28.1 billion, or 5.2 percent of the total investments by manufacturers.

Second quarter investments in the chemical material sector rose 8.3 percent from a year earlier and increased 41.1 percent from a quarter earlier as semiconductor makers placed large orders on chemical materials for their production, the MOEA said.

In addition, many petrochemical suppliers also invested large sums in equipment to roll out value added products, according to the MOEA.

The computer and optoelectronics industry took third place by investing NT$14.1 billion in fixed assets in the second quarter, up 1.7 percent from a year earlier and up 16.3 percent from a quarter earlier on the back of strong demand for servers and web communications devices, the MOEA added.

Meanwhile, the manufacturing sector posted NT$8.72 trillion in revenue, up 10.4 percent from a year earlier and 4.3 percent from a quarter earlier.

Strong demand for tech gadgets and rising raw material prices on the global market boosted revenue, according to the MOEA.

The MOEA said the revenue included sales Taiwanese manufacturers generated from their overseas-based production facilities.

The MOEA said that as the semiconductor industry continued to expand production and offshore wind developers kept coming up with new projects, fixed assets investments were likely to continue to grow.

However, the MOEA cautioned that geopolitical tensions, rising inflation, and inventory adjustments could compromise this growth.

(By Cheng Hung-ta and Frances Huang)

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