AI demand sees Taiwan industrial production rise 12% in May

Taipei, June 24 (CNA) Taiwan's industrial production rose almost 12 percent from a year earlier in May, marking the 27th consecutive month of year-on-year growth on strong demand for AI, the Ministry of Economic Affairs (MOEA) said Wednesday.

Data compiled by the MOEA showed that the industrial production index rose 11.78 percent from a year earlier to a new high of 136.65 in May, while the manufacturing subindex, which accounts for over 90 percent of total production, also hit a fresh high of 139.12, up 12.68 percent.

In the first five months of this year, the local industrial production index rose 19.12 percent from a year earlier to 125.91, with the manufacturing sector subindex rising 20.57 percent to 128.26.

The MOEA said the growth in industrial production in May largely reflected robust global demand for AI applications, high-performance computing devices and cloud-based services.

Chen Yu-fang (陳玉芳), deputy head of the MOEA's Department of Statistics, said the local manufacturing sector performed better than expected as the electronics component industry got a boost from semiconductor production.

In May, production generated by the electronics component industry rose 12.17 percent from a year earlier as AI development continued to drive up shipments of pure-play foundries' 12-inch wafers, memory chips, IC assembly and testing and IC design, the MOEA said.

The computer and optoelectronics industry also benefited from AI with higher demand for servers, switches, semiconductor inspection devices and solid-state drives, with production soaring 36.62 percent from a year earlier in May, the MOEA said.

The growth in the industry slowed from April's roughly 80 percent due to a relatively high comparison base a year earlier, but the subindex still hit 377.55 in May, indicating the industry's production stayed at high levels, Chen said.

However, the recovery of the old economy sector remained uneven last month, the data showed.

In May, the chemical materials and fertilizer industry suffered a 12.92 percent year-on-year decline in production, with some firms cutting output amid falling demand, the MOEA added.

However, as semiconductor suppliers remained keen to expand capacity, the machinery industry's production rose 10.68 percent from a year earlier, the ministry said, adding that production of the base metal industry rose 8.19 percent.

Chen said the machinery industry's production grew for the third consecutive month in May, while the base metal industry showed signs of recovery.

Looking ahead, the MOEA forecast that the manufacturing sector production subindex will hit 136.96-140.96 in June, up 19.9-23.4 percent from a year earlier. In the first half of this year, the subindex is forecast to rise 20.5-21.1 percent from a year earlier to 129.71 and 130.38.