Taiwan Factories Face Worst Supply-Chain Delays on Record

(Bloomberg) -- Factories in Taiwan faced the longest delays on record in securing raw materials and components in February as they worked overtime to keep up with surging demand from clients overseas.

Manufacturers cited low stock levels at suppliers, a shortage of freight containers and delayed shipping schedules as main reasons for the biggest delays since records began nearly 17 years ago, according to a report by IHS Markit Tuesday. This comes as the Purchasing Managers' Index rose to 60.4 last month, the highest level since April 2010, fueled by improved demand from China, Europe and the U.S.

“Supply chain delays remained severe due to limited stock at suppliers and container shortages,” IHS Markit Associate Director Annabel Fiddes said in the report. “If this persists, it could limit production capabilities and delay the delivery of products to clients.”

Global manufacturers are scrambling to secure crucial supplies of semiconductors for everything from smartphones to games consoles to cars. Officials from the U.S., Japan and Europe have pleaded with the Taiwanese government to help resolve the chip shortage as carmakers halt production while awaiting new shipments of semiconductors. The supply constraints are expected to wipe out $61 billion of sales for automakers alone.

The manufacturing data from Taiwan adds to an improving outlook for the sector across Asia. Activity in South Korea grew at the fastest pace in more than a decade while Japan, India, Indonesia, Philippines and Vietnam all registered expansions.

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