Industrial production up nearly 4% due to demand for emerging technologies

Taipei, April 23 (CNA) Taiwan's industrial production rose almost 4 percent from a year earlier in March with emerging technologies, including artificial intelligence applications and high-performance computing (HPC) devices, making up a significant part of the increase, the Ministry of Economic Affairs (MOEA) said Tuesday.

Data compiled by the MOEA showed the country's industrial production index rose 3.99 percent to 92.76 in March, reversing a 1.31 percent year-on-year decline in February. The manufacturing sector sub-index, which accounts for more than 90 percent of total production, rose 4.01 percent to 92.49.

In the first quarter, the industrial production index rose 6.01 percent from a year earlier to 87.54, while the manufacturing sector sub-index also rose 6.16 percent year-on-year to 87.21, ending a six-quarter falling streak, data showed.

Speaking with reporters, Huang Wei-jie (黃偉傑), the ministry's Department of Statistics deputy leader, said increasing production in the manufacturing sector was largely due to solid demand for AI applications, HPC gadgets, and cloud-based services.

In March, production by the electronics component industry was up 13.27 percent from a year earlier, marking the third consecutive month of year-on-year growth, the MOEA said.

In addition, IC designers, printed circuit board suppliers, motherboard manufacturers and memory chip providers also saw an increase in orders, the MOEA added.

Integrated circuit manufacturers in the electronics component industry saw production rise 18.91 percent from a year earlier in March. However, flat panel makers suffered a 6.83 percent year-on-year drop in production, according to the MOEA.

AI and cloud-based gadgets also pushed up demand in the computer and optoelectronics industry, which saw production rising 15.15 percent from a year earlier in March, the ninth straight month of a year-on-year increase, according to the MOEA.

In contrast to the booming tech sector, major old economy industries continued to register a decline in production amid weak demand and as global economic recovery remained slow, Huang said, adding that weakness had compromised overall production growth in March.

Production in the base metal industry fell 5.69 percent from a year earlier in March in the wake of a fall in production among steel billet, cold rolled and hot rolled steel plate and aluminium alloy makers which felt the pinch from low-priced imports, the MOEA said.

In March, the machinery industry's production fell 9.91 percent from a year earlier as investors appeared hesitant to increase investments given that the global economy was growing at a slow pace, the MOEA said.

Also in March, production posted by the chemical material and fertilizer industry moved lower by 8.23 percent from a year earlier amid escalating competition, while production generated by the auto and auto part industry dropped 9.87 percent from a year earlier as auto demand weakened after the Lunar New Year holiday, which fell in February, the MOEA said.

Looking ahead, the global economy remains haunted by high interest rates, inflation, escalating trade tensions between the United States and China, and lingering geopolitical uncertainties, Huang said.

The silver lining is that Taiwan is expected to continue to see booming demand for emerging technologies, which will boost production in supply chains, Huang added.

He said it is very likely that local manufacturing sector production will continue to grow quarter by quarter.