Demand for consumer electronics has declined in the second half of the year due to inflationary pressures, battering Taiwan's electronics supply chain. Export orders in August plummeted 2 percent year-on-year.
The "destocking" wave is continuing to ripple through Taiwan's electronics supply chain. Demand in European and American end markets has declined, causing the value of export orders in August to plummet by 2 percent year-on-year. In particular, electronics and optical equipment saw declines of 4.6 and 2.1 percentage points, respectively. However, Pegatron Corporation Chairperson T.H. Tung remains optimistic. He says the wave of destocking won't affect Taiwan's factories for long.
T.H. Tung, Chairperson, Pegatron Corporation: “I believe good adjustments will be made after one to two quarters. Anyway, autumn and winter have always been the peak seasons for tech companies to release new products. It looks like consumer spending remains strong.”
Wang Mei-hua, Economic Affairs Minister: “The industry already knows that there will be big uncertainties and pressure in the second half of the year. Other sectors, including niches, including cars or data centers, still have their related needs, so the industry will accurately produce and schedule.”
Meanwhile, the U.S. continues to broaden its ban on advanced chip shipments to China. The media has reported that new regulations will be announced in October that will restrict American companies from supplying customers in China with equipment that can be used to make artificial intelligence computing chips or sub-14 nanometer chips. Tung said there will be an impact, but it won't have as big an impact as the U.S.-China trade war.
T.H. Tung, Chairperson, Pegatron Corporation: “Biden understands the issues that I don't understand, haha. The impact won't be bigger than the previous U.S.-China trade war. It probably arose from the U.S.-China trade war.”
Scholars say the U.S. may start requiring companies to have licenses to export chips and related products to China. However, advanced chips that can be used for military purposes cannot be sold to China.