TAIPEI (CNA) — The production value of Taiwan’s manufacturing sector is expected to drop more than 5 percent in 2020 from a year earlier, due to the global impact of the COVID-19 coronavirus pandemic, the government-sponsored Industrial Technology Research Institute (ITRI) said Thursday.
Amid production disruptions and massive lockdowns in many countries, the global economic fundamentals have deteriorated, hurting demand worldwide and toppling international crude oil prices, the ITRI’s IEK Consulting said.
As a result of those factors, the output of Taiwan’s export-oriented manufacturing sector is likely to shrink this year by an annual 5.05 percent to NT$18.59 trillion (US$622 billion), IEK Consulting said.
The local chemical industry is expected to be hardest hit, dropping 16.36 percent from a year earlier to NT$3.81 trillion, according to the consulting group.
Liou Ming-huan (劉名寰), a manager with IEK Consulting, told reporters that the local chemical industry is under pressure due to falling oil product prices caused by an oversupply of crude in the global market.
Meanwhile, the 2020 production value of Taiwan’s metal/machinery industry is likely to fall by an annual 4.62 percent to NT$5.24 trillion, IEK Consulting said.
It also forecast that the output of the consumer-oriented light industry, which includes textile and food makers, will fall 2.69 percent from a year to NT$2.44 trillion.
Liou said, however, that the information/electronics sector is forecast to buck the downturn, as demand for emerging technologies such as 5G and artificial intelligence remains solid, while an increase in remote work and online learning applications is expected to boost sales of relevant gadgets.
As a result, the 2020 production value of Taiwan’s information/electronics industry is expected to increase 1.10 percent from a year earlier to NT$7.10 trillion, according to IEK Consulting.
ITRI analyst Chiang Po-feng (江柏風) said the local semiconductor industry will also benefit from higher demand for AI, 5G, automotive electronics, and Internet of Things technologies, rising in production value by an annual 4.0-5.7 percent in 2020.
In 2019, the production value of Taiwan’s manufacturing sector grew only 0.02 percent from a year earlier, amid trade frictions between the United States and China.