The sluggish performance of Taiwanese companies, which supply a large number of semiconductor and digital products to global IT giants such as Apple, is likely to be prolonged. The Nikkei business daily surveyed the combined operating income of 19 major Taiwanese IT companies in May, showing an 8.8 percent decline from a year earlier. Performance has been lower than the previous year for four consecutive months. In China and the United States, PC and smartphone sales are significantly depressed, and production recovery is slow.
The combined operating income of Taiwan’s 19 major IT-related companies (major listed companies in Asia =Asia300) in May was NT $1.1173 trillion. Revenue fell at 14 of 19 companies.
Hon Hai Precision Industry, the largest of the 19 companies by revenue, fell 9.5 percent. Four consecutive months of negative growth. The contract manufacturing of Apple’s iPhone, its main business, is struggling with sluggish growth.
Mediatek, Taiwan’s largest semiconductor designer, has also been in a prolonged slump. Operating income fell 39.4 percent in May, the eighth consecutive month of year-on-year declines. The company is strong in its business to smartphone makers in mainland China, but its performance continues to be affected by sluggish smartphone sales due to the worsening economy in the mainland.
Previously, due to the expansion of the COVID-19, the demand for personal computers from home office has expanded, and now the relevant manufacturers are troubled by the decline in demand.
Quanta Computer, the world leader in the contract manufacturing of Apple’s MacBook notebook computer, saw its operating income drop 3.7 percent in May. Compal Computer industry also fell 6.7 percent year-on-year.
Makers of semiconductors, which are widely used in digital products, are also facing a tough situation. United Microelectronics Co., the world’s third largest semiconductor contract manufacturer, saw a 23.1 percent decline, while Nanya Technology Co., Ltd. also fell 62.7 percent. Nanya Technology’s operating income has been lower than the previous year for 14 consecutive months.
On the other hand, as the production of generative AI semiconductors is expected to increase, Taiwan Semiconductor Manufacturing Co. ‘s (TSMC) operating income fell only 4.9% in May, narrowing the decline. There was a double-digit decline in March and April. The further recovery of production in the second half of the year from June to December is noteworthy.
Source: Nikkei Chinese