Taiwan's semiconductor supply chain suffered another blow in May as trade tensions intensified

Taiwan's semiconductor supply chain suffered another blow in May as trade tensions intensified

tenco 2019-06-04

Taiwan's manufacturing purchasing managers' index (PMI) came in at 48.2 per cent in May, falling below 50 per cent again.

The PMI rose back above the point of expansion in April, mainly as orders returned to normal, reducing fears of a trade war.But trade tensions between China and the United States flared up again in early may, shaking global stock markets and straining global technology supply chains, particularly in the semiconductor sector, where the Philadelphia semiconductor index fell more than 16 percent in May.

The PMI fell to 48.2 per cent in May, with new orders, production volumes, employment, inventories and supplier delivery times all contracting.The basic raw materials industry and the electric power and mechanical equipment industry among the six major industries have become retrenchment.Although the chemical and biotechnology medical industry, the electronic and optical industry and the vehicle industry continue to expand, the expansion rate is also slowing down.Only the food and textile industry showed an acceleration of expansion.

In addition, the "outlook for the next six months" index of all manufacturing sectors plunged 7.2 percent to a contraction of 48.5 percent.Chen sikuan, President of the China institute of economic research, said that the trade war and the us ban on the export of goods to huawei and other manufacturers have caused manufacturers to turn to wait-and-see mode, further affecting their ability to pull goods and lowering their outlook for the future.

According to the analysis of the Chinese academy of economics and business, headwinds from international trade have slowed global economic growth this year, with most major countries and regions showing a downward trend, which has also affected Taiwan's economic growth momentum.