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Industrial production ends 19th straight month of decline in January

02/29/2024 09:58 PM
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Workers work at a motor factory in Kaohsiung. CNA file photo
Workers work at a motor factory in Kaohsiung. CNA file photo

Taipei, Feb. 29 (CNA) Taiwan's industrial production broke a 19-month falling streak and was up more than 15 percent from a year earlier, following solid demand for emerging technologies and moves by companies to rebuild inventories before the Lunar New Year holiday, the Ministry of Economic Affairs (MOEA) said Thursday.

Data compiled by the MOEA showed the local industrial production index rose 15.98 percent from a year earlier to 91.83 in January, while the sub-index in the manufacturing sector -- which accounts for more than 90 percent of overall industrial production -- rose 16.63 percent from a year earlier to 91.68, putting an end to a 19-month falling streak.

On a month-to-month basis, Taiwan's industrial production index rose 1.49 percent with the manufacturing sector sub-index moving higher by 1.58 percent year-on-year, the data showed.

The MOEA said the export-oriented manufacturing sector rode the waves of strong demand for artificial intelligence applications, cloud-based data services, and high-performance computing devices (HPC) at a time when clients rushed to place orders in preparation for a buying spree during the Lunar New Year holiday.

The MOEA added the spike in industrial production also reflected a relatively low comparison base over the same period last year.

All of the major industries in the manufacturing sector recorded growth in January, according to MOEA data.

In January, production generated by the local electronics component industry -- the backbone of Taiwan's outbound sales -- saw production rise 10.73 percent from a year earlier, stopping a 16-month falling streak, with production of 12-inch wafers boosted by strong demand for AI and HPC devices, the MOEA said.

The computer and optoelectronics industry posted a 35.30 percent year-on-year increase in production in January on the back of AI applications and cloud-based services, while an increase in orders placed on servers and other computer equipment, as well as smartphone lenses, also boosted production, the MOEA added.

In the old economy sector, production posted by the base metal, chemical raw material and fertilizer, machinery, and auto/auto part industries moved higher by 19.80 percent, 8.88 percent, 19.41 percent, and 45.52 percent, respectively, from a year earlier in January, according to the MOEA.

The MOEA said these old economy industries largely benefited from an increase in orders before the Lunar New Year and a relatively low comparison base over the same period last year.

In particular, the strong growth in the auto/auto part industry came from rising demand for maintenance services from the U.S. and European markets, while strong demand from clients in the local market also pushed up the production of auto parts, the MOEA said.

Looking ahead, Huang Wei-jie (黃偉傑), deputy head of the MOEA Department of Statistics, said the global economy is expected to remain haunted by high interest rates, trade tensions between the United States and China, the Ukraine-Russia war, and the Israel-Hamas conflict.

Huang said how the Chinese economy, the second largest in the world, evolves, will be critical to the global economy.

The silver lining, however, is that solid demand for HPC devices, AI applications, and automotive electronics will continue to help boost global demand, helping the local manufacturing sector offset any negative impact, Huang said.

Huang said production in the local manufacturing sector is expected to fall 1.3-6.3 percent from a year earlier in February due to seasonal factors caused by the Lunar New Year holiday.

However, production by the manufacturing sector during the first two months of this year as a whole is forecast to grow 5.1-7.7 percent from a year earlier, after eliminating seasonal factors, Huang said, adding that as demand for emerging technologies continues to stay solid, Taiwan's exports are poised to increase this year.

(By Liu Chien-ling and Frances Huang)

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