Chart of the Day: Singapore's semiconductor production weakens amidst slow down in sales

Semiconductor production growth weakened from 27.4% in February to 18.8% in March.

This chart from UOB shows that Singapore's production of semiconductors is at 18.8% in March 2018, reflecting the manufacturing sector's resilience but also a slowdown in the background. Last month, production growth hit a whopping 27.4%.

2017 had been good for the manufacturing sector as it followed a 95.7% production surge in 2016. UOB said that the high base from 2017 will result in a slower pace of expansion across the various manufacturing clusters over the next three quarters. "This could be especially true for the electronics cluster," it said.

Moreover, the slower pace of expansion in the Asia Pacific semiconductor sales may point to a similar growth path for Singapore’s electronics production. Ever since the 26.6% growth of semiconductor sales in Asia, the pace has slowed down to 4.8% in March.

Singapore continues to be reliant on electronics production as it contributes 17% to total industrial production. The sector's growth has bolstered overall industrial production by 5.9% YoY.

UOB is bearish in its forecast of 4.4% YoY in 2018, taking into consideration of the expected slowdown due to the high base effect.