Taiwan Industry August 2015


Industrial production benefits from Apple's new iPhone debut

Taiwan’s industrial output increased substantially in August, backed by a base effect but also due to strong growth in semiconductor manufacturers’ output, which benefited from the debut of Apple’s latest iPhone model. Industrial production jumped 7.7% in August over the same month last year (July: -0.4% year-on-year), which is the fastest expansion in 20 months, according to the Directorate-General of Budget, Accounting & Statistics (DGBAS). The growth rate also benefited from a 5.9% decline registered in August 2015.

Accordingly, the subcategory of manufacturing—which contributes 93% to overall industrial output—soared 8.4% annually in August (July: +0.6% yoy). The DGBAS commented in a press release that, “sales of mobile devices by global brands stimulated inventory demand for electronic components, which spurred production in foundry, chip packaging and chip substrates.” Chipmaker Taiwan Semiconductor Manufacturing and chip packaging and testing service provider Advanced Semiconductor Engineering Inc. are among the biggest beneficiaries of Apple’s launch of the iPhone 7 series in early September. In addition, activity in mining and quarrying and construction rebounded strongly in August.

A month-on-month comparison shows that industrial output jumped a seasonally-adjusted 1.8% in August, which was well up from July’s 0.4% increase. The trend suggests that the ongoing slow recovery in the sector continues, as the annual average variation in industrial production rose from minus 3.5% in July to minus 2.4% in August.

Analysts participating in our Consensus Forecast expect that industrial production will continue to recover in the coming months. The expect industrial production to contract 0.1% in 2016, which is unchanged from last month’s forecast. For 2017, participants expect industrial output to rebound and expand 1.9%.

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Taiwan Industry Chart

Taiwan Industry August 2016

Note: Year-on-year and annual average var. of industrial production index in %.
Source: Directorate-General of Budget, Accounting & Statistics (DGBAS).

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