Manufacturers’ sales fell in 2019 but R&D spending hit 5-year high

Taipei,  Taiwanese manufacturers saw a sales drop of almost 3 percent in 2019, amid a trade war between the United States and China, but their spending on research and development (R&D) rose to a five-year high, according to the Ministry of Economic Affairs (MOEA).

MOEA data indicated that with the Washington-Beijing trade dispute sending ripples through the global economy and dragging down raw material prices, the revenue of manufacturers listed on the stock market fell 2.8 percent from a year earlier to NT$16.5 trillion (US$552 billion).

Nonetheless, manufacturers here continued to invest in R&D, spending NT$460.8 billion in 2019, an annual increase of 7.9 percent, the highest amount and biggest growth in five years, the data showed.

In 2019, the old economy sector was hardest hit by the U.S.-China trade war and falling product prices, the data indicated.

Sales in the chemical material segment, oil/coal suppliers and base metal makers dropped 18.8 percent, 15.7 percent and 12.5 percent, respectively, according to the data.

The tech sector was resilient, with the sales in the computer/optoelectronics and electronics component industries declining only 0.3 percent and 1.0 percent, respectively, the figures showed.

Among all manufacturers in Taiwan, iPhone assembler Hon Hai Precision Industry Co. generated the strongest sales of NT$2.85 trillion, followed by a smaller iPhone assembler Pegatron Corp. with NT$1.26 trillion, and contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) with NT$1.06 trillion.

In 2019, local manufacturers saw a 19.8 percent annual drop in net income to NT$1.23 trillion, the MOEA said.

In terms of R&D spending, the local electronics component industry was the biggest spender in 2019, increasing its allocation by 8.7 percent to NT$266.3 billion, followed by the computer/optoelectronics industry, which raised spending by 6.3 percent to NT$123.8 billion, according to the data.

The two industries accounted for 84.7 percent of the total R&D spending in Taiwan’s manufacturing sector in 2019.

Among the companies in the manufacturing sector, TSMC was the top R&D spender last year, with an investment of NT$90.5 billion, followed by integrated circuit designer MediaTek Inc. with NT$36.9 billion, and contract electronics maker Wistron Corp. with NT$12.3 billion.

 

Source: Focus Taiwan News Channel

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