Industrial production rises for 5th straight month

Taipei, Aug. 23 (CNA) Taiwan's industrial production rose more than 12 percent from a year earlier in July, as the popularity of emerging technologies such as artificial intelligence development continued to lend support to the export-oriented manufacturing sector, the Ministry of Economic Affairs (MOEA) said Friday.

Data compiled by the MOEA showed that the local industrial production index rose 12.30 percent from a year earlier to 95.50 in July, while the sub-index of the manufacturing sector, which accounts for more than 90 percent of total production, grew 12.97 percent year-on-year to 94.84.

On a month-on-month basis, the local industrial production index rose 1.87 percent with the sub-index of the manufacturing sector up 1.90 percent, the data indicated.

In the first seven months of this year, the industrial production index rose 10.49 percent to 91.08, while the sub-index for the manufacturing sector rose 10.83 percent to 90.66.

Speaking to reporters, deputy head of the MOEA's Department of Statistics Huang Wei-jie (黃偉傑) said the local high tech sector received a boost from strong demand for AI applications, high performance computing (HPC) devices and cloud services in July, while international brands rebuilt their inventories before the launch of new products, which also benefited Taiwanese electronics exporters.

In addition, Huang said the upcoming year-end peak buying season in U.S. and European markets and the "Double 11 (Nov. 11 single day)" shopping season in China has also prompted international vendors to raise inventories to meet demand.

In July, production generated by the electronics components industry rose 20.12 percent, as solid demand for AI, HPC as well as consumer electronic gadgets pushed up shipments of 12-inch wafers provided by pure play foundry operators, main boards, wafer testing services and printed circuit boards, the MOEA said.

The computer and optoelectronics industry also rode the wave of IA and cloud services to post a 32.21 percent year-on-year increase in production, at a time of an increase in production in servers, cameras used in mobile devices and semiconductor inspection equipment, the MOEA added. It was the 13th consecutive month the industry has posted a year-on-year increase in production, Huang said.

Old economy industries appeared mixed as recovery of end user demand failed to materialize in line with earlier market expectations, Huang said, adding that Typhoon Kaemi in July also interrupted the production of many old economy firms in southern Taiwan.

Production generated by the machinery industry rose 2.64 percent from a year earlier in July with the semiconductor industry keen to expand by installing new equipment, while production posted by the chemical and fertilizer industry also rose 3.95 percent as clients in the downstream segment started rebuilding inventories, the MOEA said.

Bucking the upturn, the base metal industry suffered a 2.88 percent year-on-year decline in July as the recovery of the global steel market was below an earlier estimate, the ministry said.

The auto and auto parts industry also recorded an 8.21 percent year-on-year decline in production in July as sales of fuel-powered Taiwan-made small passenger cars were impacted by imported cars and electric vehicles, the MOEA said, adding that a fall in orders placed for locally made auto parts was also cited as a reason for the production decline.

With the U.S. Federal Reserve likely to kick off a rate cut cycle in September to stimulate the economy and boost demand, production in the local manufacturing sector is forecast to range between 93.94 and 97.94 in August, up 4.2-8.6 percent from a year earlier and the sixth straight month of year-on-year growth, Huang said.