R&D Investment up at Taiwan's Manufacturers in Q2 Amid Lower Fixed Asset Investment

According to Taiwan's Department of Statistics of the Ministry of Economic Affairs (MOEA), in Q2, 2014 Taiwan's listed manufacturers' R&D investment totaled NT$131.6 billion (US$4.38 billion), up 7.9% year on year, contrasting fixed asset investment dropping 8% to NT$276.6 billion (US$9.2 billion).

Of the R&D spending, the information-technology/electronics sector accounted for 82.5%, or NT$108.5 billion (US$3.6 billion), up 7.6% YoY. The metal/electromechanical sector's spending represented 6.3% or NT$13.9 billion (US$463.3 million), up 6.3% YoY.

Pure foundry giant Taiwan Semiconductor Manufacturing Co. (TSMC) topped all listed  manufacturers on the island in R&D spending at NT$13.6 billion (US$453.3 million), up 14% YoY. Hon Hai Precision Industry Co., Ltd., a major ITC contractor, trailed TSMC with NT$11.4 billion (US$380 million), up 5.9% YoY. Chip vendor MediaTek Inc. came third with revenue exceeding the NT$10 billion (US$333.3 million) mark to NT$10.4 billion (US$346.6 million), spiking 59.6% YoY.

As to fixed asset investment, the chemical industry posted a 4.6% growth YoY partly thanks to investments by some manufacturers in new bioethylene factories, the only industry with growth in such investment. The information-technology/electronics industry registered the steepest reduction of NT$14 billion (US$466.6 million) due to the total reduction of NT$19 billion (US$633.3 million) by PC, electronics and optoelectronics manufacturers, which offset the increase in NT$5.1 billion (US$170 million) by electronics-component manufacturers.

Throughout H1, 2014, the total investment in fixed assets by Taiwan's listed manufacturers was NT$569.1 billion (US$18.9 billion), down 4.8% YoY.

The data also shows that the island's listed manufacturers generated total Q2 consolidated revenue of NT$5.6 trillion (US$187.2 billion), up 4.6% YoY  for the fourth quarterly positive growth. The information-technology/electronics industry saw revenue increase 3.1% YoY due to strong market for smartphones, PCs, tablet PCs, and 4K2K TVs. The metal/electromechanical industry's consolidated revenue grew 11.5% due to brisk demand for machines and stainless steel, with the chemical industry's up 4.9% thanks to surging prices and volume of plastic-chemical products. That of the staple industry increased 4.6% mostly thanks to surging shipments and output of cement manufacturers operating in China and rising shipments of functional clothing due to the FIFA World Cup 2014.

Throughout H1, 2014, Taiwan's listed manufacturers generated consolidated revenue of NT$10.9 trillion (US$364.1 billion), up  4.1% YoY to hit a new high since 2008.

Manufacturers altogether made after-tax net income of NT$278.8 billion (US$9.29 billion) in Q2, with net profit ratio rising 0.7 of a percentage point YoY to a four-quarter high of 5.0%. Information-technology/electronics manufacturers registered the highest net profit ratio of 5.4%, up one percentage point YoY. Metal/electromechanical manufacturers trailed in second with 4.9%, down 0.3 of a percentage point YoY. Throughout H1, 2014,  manufacturers combined registered net profit ratio of 4.8%, up 0.6 of a percentage point YoY. (KL)