YIBADA

Chinese Economy Negatively Affects Taiwan Tech Sales

| Apr 15, 2017 07:23 AM EDT

Taiwan Tech Companies' Revenues Decreased

Taiwan tech sales experienced a sharp decline in March, being dragged by the slowdown in Chinese economy. The decrease of orders from Chinese phone manufacturers and an unfavorable exchange rate brought pressure to the export-dependent electronics sector.

According to Nikkei Asian Review, the total revenue of the 19 tech companies it monitors increased by 2.67 percent from last year to NT$885.5 billion ($28.97 billion) in March, a sharp decline from the above 12 percent year-on-year growth in February. Eleven of the 19 major tech companies reported an increase in sales in March, lower than the 18 in February.

Taiwan’s export in general also slowed, growing by just 13.2 percent year-on-year in March, compared with 27.7 percent in the previous month.

According to Jeff Pu, an analyst at Yuanta Investment Consulting, “the major factor that led to a growth deceleration in March is the strong Taiwanese dollar and the substantial slowdown in orders from Chinese device makers.”

The decrease in the demand for iPhone 7 series also affected the sales of Apple suppliers, said Pu. The combined revenues of major Apple suppliers on NAR’s list grew by less than one percent in March from last year.

Hon Hai Precision Industry, a key iPhone assembler popularly known as Foxconn Technology Group, had a 0.61 percent year-on-year sales increase to NT$341.69 billion in March.

Pegatron, Foxconn’s smaller competitor, had a 16.87 percent revenue drop from a year ago to NT$74.29 billion.

Catcher Technology, an Apple major supplier for metal casing, recorded nearly 23 percent decline in sales last month.

Pegatron and Catcher are suppliers for the smaller 4.7-inch iPhone model that had a lukewarm demand. Both companies experienced a struggle in their quarterly revenue from last year.

In March, a 17.5 percent sales growth to NT$85.87 billion from a year ago was recorded for Taiwan Semiconductor Manufacturing Co., the largest contract chipmaker in the world and a major supplier for iPhone core processors. The company gained NT$233.91 billion revenue in the first quarter, increased by 14.9 percent year-on-year.

Though, TSMC’s quarterly sales failed to meet the company’s guidance of NT$236 billion–NT$239 billion in January, negatively affected by the strong Taiwanese dollar and the slowing demand from Chinese smartphone manufacturers.

According to the company, the unfavorable exchange rate in the first quarter has brought NT$ billion losses. The Taiwanese dollar grew stronger against the U.S. dollars by about 6 percent, hurting many export companies.

Taiwan tech companies hope for better sales and for the growth of the Chinese economy.

Related News

Most Popular

EDITOR'S PICK