AI demand drives industrial production to record high in July

Taipei, Aug. 25 (CNA) Taiwan's industrial production index hit a record high in July on strong demand for AI-related products, with the sub-index for the manufacturing sector also posting its highest level on record, according to data released by the Ministry of Economic Affairs (MOEA) on Tuesday.

The industrial production index rose 25.61 percent from a year earlier to 145.24 in July, marking a 29th consecutive month of year-on-year growth. In the first seven months of the year, the index rose 20.64 percent to 130.56.

The manufacturing production index, which accounts for more than 90 percent of Taiwan's total industrial production, also hit a record high of 147.65 in July, up 26.89 percent from a year earlier. It likewise marked the sector's 29th consecutive month of growth.

Chen Yu-fang (陳玉芳), deputy head of the MOEA's Department of Statistics, said manufacturing output in July exceeded expectations, mainly because production in the electronic components and computer, electronic and optical products industries was stronger than anticipated amid robust demand for wafer foundry services and AI servers

The MOEA data showed that production in the electronic components industry rose 22.72 percent from a year earlier to a record high of 153.46 in July, while semiconductor production increased 26.45 percent to 174.96.

The computer, electronic and optical products industry posted an even stronger increase, with production surging 95.62 percent year-on-year to 457.70. The industry has now recorded year-on-year growth for 37 consecutive months, the longest growth streak on record.

Among traditional industries, machinery production increased 19.75 percent from a year earlier, supported by expansion in the semiconductor industry and stronger demand for electronic component materials.

In contrast, production in the chemical and fertilizer industry fell 5.88 percent amid weak market demand, while automobile and auto parts production declined 5.03 percent as manufacturers continued to adjust inventories.

Looking ahead, the MOEA said manufacturers expect production to increase in August, when the ministry forecasts the manufacturing production index will range from 149.52 to 153.52, representing year-on-year growth of 25.5-28.9 percent.