Taiwan's industrial production down for 7th straight month in March

Taipei, April 25 (CNA) Industrial production in Taiwan fell for the seventh consecutive month in March, as manufacturers and exporters felt the pinch of weakening global demand, according to the Ministry of Economic Affairs (MOEA).

Taiwan's industrial production index for March fell 14.52 percent from a year earlier to 119.69, with the manufacturing subindex, which accounts for more than 90 percent of the total industrial production, also falling 15.21 percent from a year earlier to 121.33.

The decline in industrial production in March came after a 7.66 percent dip for the same index in February, according to the MOEA.

In the first quarter of this year, Taiwan's industrial production index dropped 14.72 percent from a year earlier to 112.02, with the subindex of the manufacturing sector falling 15.39 percent year-on-year to 113.56, the MOEA data indicated.

Speaking with reporters, Huang Wei-chieh (黃偉傑), deputy director of the MOEA's Department of Statistics, said demand for consumer electronics products stayed weak with inventory adjustments in the supply chain underway.

Huang said production capacity utilization was on the decline among tech industries to push their production in March and the fall appeared more apparent in electronics component makers such as pure play wafer foundries, flat panel display suppliers, structure IC producers, and memory chip makers due to a relatively high comparison base over the same period of last year.

As a result, production in the electronics component industry fell 22.00 percent from a year earlier in March, with production among semiconductor and flat-screen makers dropping 18.87 percent and 43.79 percent, respectively, from a year earlier, the MOEA's data showed.

In the first three months of the year, the electronics component industry saw production falling 19.86 percent from a year earlier, with production of semiconductor and flat panel makers shedding 15.37 percent and 49.70 percent, respectively, from a year earlier, the data indicated.

Outperforming the broader manufacturing sector, production generated by the computer and optoelectronics industry rose 0.15 percent from a year earlier on the back of solid demand for servers used in cloud-based data storage gadgets, which prompted the industry to expand production capacity, the MOEA said.

Huang said orders on Taiwan-made servers largely came from U.S. buyers, urging the market to keep alert over the upcoming investor conferences scheduled by American tech giants to open shortly for more clear clues about the business climate down the road.

In the first quarter, production posted by the computer and optoelectronics industry remained resilient, falling only 0.46 percent from a year earlier, according to the MOEA,

The MOEA said old economy industries largely continued to see impact resulting from inventory adjustments among their clients who scaled back their orders.

In March, production generated by chemical material, base metal and machinery industries fell 12.20 percent, 14.23 percent and 21.91 percent, respectively, from a year earlier, according to the MOEA.

In the first quarter, the chemical material, base metal and machinery industries recorded a 17.54 percent, 15.05 percent and 22.28 percent year-on-year decline, respectively, in production, the MOEA said.

The auto and auto part industry bucked the downturn with its production by rising 1.84 percent from a year earlier, as car brands unveiled new models to boost buying, while its production also rose due to an eased supply shortage, the MOEA said.

In the first quarter, production of the auto and auto part industry fell 0.83 percent from a year earlier, according to the MOEA.

Huang said while inventory levels in the manufacturing sector remained high in the first quarter, the silver lining was that the pace of inventory adjustments in old economy industries appeared faster than their tech counterparts'.

Huang said as Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, had told an investor conference held last week that it expects sales for 2023 to fall 1-6 percent from a year earlier, a downgrade from its earlier estimate of a slight increase made in mid-January, so it is possible that the semiconductor industry will see a delayed recovery.

But, emerging technologies such as high performance computing, cloud-based data centers, automotive electronics and artificial intelligence are expected to continue to provide some support to the tech industries, Huang said.

According to Huang, production of the manufacturing sector is expected to move lower in April, marking the eighth consecutive month of a year-on-year decline.