Industrial production up for 2nd straight month in April

Taipei, May 24 (CNA) Solid demand for emerging technologies such as artificial intelligence applications pushed up Taiwan's industrial production for a second straight month in April, according to the Ministry of Economic Affairs (MOEA).

The local industrial production index rose 14.61 percent from a year earlier to 87.70 in April after having risen 4.20 percent in March, data compiled by the MOEA showed.

The sub-index for the manufacturing sector, which accounts for more than 90 percent of Taiwan's total industrial production, also rose 14.90 percent from a year earlier to 87.30, the data showed.

On a month-over-month basis, the industrial production index fell 5.65 percent and the sub-index for the manufacturing sector also slid 5.77 percent, the MOEA data showed.

In the first four months of 2024, the industrial production index was up 8.11 percent from a year earlier to 87.63, with the sub-index for the manufacturing sector up 8.26 percent at 87.27, according to the MOEA.

Huang Wei-jie (黃偉傑), the deputy head of the MOEA's Department of Statistics, said a boom in AI development has given a considerable boost to global demand for tech gadgets, lending support to Taiwan's export-oriented electronics component, computer and optoelectronics manufacturers.

The production index for Taiwan's electronics component sector rose 23.01 percent in April from a year earlier, with the sub-index for semiconductor suppliers soaring 30.44 percent, largely due to high demand for 12-inch chips provided by pure play wafer foundries.

According to Huang, the growth in the semiconductor index in April was the highest year-on-year rise in the sector in almost three years.

Bucking the upturn, flat panel and component makers saw their production index fall for a third straight month in April, tumbling 8.68 percent from a year earlier. Huang said the fall came as the consumer electronics market failed to show a meaningful recovery.

The production index for the computer and optoelectronics industry rose 37.14 percent in April from a year earlier, hitting a new high of 116.87, the MOEA said.

Huang said the surge reflected strong shipments of AI servers, which are more expensive than traditional servers, and moves by Taiwanese manufacturers in China to move some of their resources back to Taiwan.

The old economy sector largely reversed its previous weakness, reporting increases in production in April, the MOEA said.

In the machinery industry, the production index rose 8.21 percent from a year earlier in April, backed by an increase in equipment purchases by semiconductor makers seeking to expand capacity and a relatively low base of comparison in April 2023, the MOEA said.

The chemical raw material and fertilizer sector's production index rose 5.07 percent from a year earlier in April as foreign buyers started to rebuild inventories, while the index for the auto and auto parts sector edged up 0.43 percent year-over-year due to higher electric vehicle and car lamp exports.

The base metal industry's production index, however, fell 4.41 percent in April from a year earlier as low-priced steel products disrupted the global steel market, causing many suppliers to cut production.

Huang said the growing popularity of AI applications is expected to continue to boost Taiwan's high-tech sector, forecasting that the production index in the manufacturing sector will grow 6.7-11.4 percent in May to between 89.63 and 93.63.

Still, Huang cautioned that persistent inflation, high interest rates, ongoing trade tensions between the United States and China, and geopolitical uncertainty could negatively affect the global economy down the road.