Taiwan's industrial production up for 17th straight month on strong AI demand

Taipei, Aug. 26 (CNA) On the back of continued strong global demand for emerging technologies such as artificial intelligence applications, Taiwan's industrial production rose more than 18 percent from a year earlier in July, marking the 17th consecutive month of year-on-year growth, the Ministry of Economic Affairs (MOEA) said Tuesday.

Data compiled by the MOEA showed the industrial production index rose 18.11 percent from a year earlier to 113.53 in July, while the subindex of the manufacturing sector, which accounts for more than 90 percent of total production, rose 19.55 percent from a year earlier to 114.22.

In the first seven months of this year, the industrial production index rose 16.85 percent from a year earlier to 106.74, with the subindex of the manufacturing sector up 18.02 percent at 107.43, the data indicated.

Speaking to reporters, Chen Yu-fang (陳玉芳), deputy head of the MOEA's Department of Statistics, said the export-oriented manufacturing sector got another boost from the growing popularity of AI applications, high-performance computing (HPC) devices and cloud services.

In July, the electronics component industry saw production rise 29.52 percent from a year earlier, with semiconductor suppliers generating a 33.91 percent year-on-year increase in production on the back of strong shipments from pure wafer foundry operators, IC designers, and IC packaging and testing service providers.

In addition, production in the computer and optoelectronics industry rose 39.03 percent from a year earlier on the back of strong demand for servers, communications devices, switches, semiconductor equipment inspection devices and solid-state drives.

Chen said, however, old-economy industries largely lagged behind their tech counterparts in July due to continued weak demand, which prompted companies in the segment to scale back production.

Production in the base metal industry fell 6.17 percent from a year earlier in July due to demand weakness in the steel market; the chemical materials and fertilizer industry's production dropped 4.29 percent on a supply glut; and the auto and auto parts industry suffered a 2.00 percent year-on-year decline in production due to falling demand, the MOEA's data showed.

Outperforming the old-economy segment, the machinery industry benefited from increased investment by semiconductor firms to expand production, which boosted demand for equipment and pushed production up 7.62 percent from a year earlier in July, the MOEA said.

Looking ahead, the MOEA said international trade is expected to continue to be impacted by growing protectionism and lingering geopolitical unease, while booming demand for AI applications and HPC devices will continue to support Taiwan's tech exporters.

Chen said efforts by tech brands to launch new products are expected to drive production in the manufacturing sector higher in August.

Due to a relatively high comparison base over the same period last year, however, Chen said the growth of the manufacturing sector's subindex is expected to be moderated to between 9.6 percent and 13.5 percent year-on-year, with the subindex forecast to reach between 112.19 and 116.19.

AI development and the debut of new consumer electronics devices are expected to lend support to Taiwan's industrial production in the second half of this year, Chen said.