Taiwan's industrial production hits new high in August on strong AI demand

Taipei, Sept. 23 (CNA) Taiwan's August industrial production set a new record, with the index soaring more than 23 percent from a year earlier due to robust global demand for artificial intelligence applications, the Ministry of Economic Affairs (MOEA) said on Wednesday.

Data compiled by the MOEA showed the local industrial production index rose 23.47 percent from a year earlier to 145.97, beating the previous high of 143.32 in July, while the subindex of the manufacturing sector, which accounts for over 90 percent of the country's total production, rose 24.61 percent to reach 148.42.

August marked the 30th consecutive month that both indexes moved higher on a year-on-year basis, the data indicated.

In the first eight months of this year, Taiwan's industrial production index rose 20.80 percent from a year earlier to 132.24, with the subindex of the manufacturing sector rising 22.14 percent to 134.60, the MOEA said.

In August, the MOEA said, the electronics component industry saw its production rise 21.68 percent from a year earlier as demand for high performance computing devices and other AI-related applications pushed up production by Taiwanese 12-inch pure play foundry operators, DRAM suppliers, IC assembly and testing firms, and IC designers.

Inside the electronics component industry, production by integrated circuit firms rose 24.24 percent from a year earlier in August., according to the MOEA.

Riding the waves of AI applications and cloud services, which boosted demand for AI servers, switches, semiconductor inspection equipment and automation equipment, the local computer and optoelectronics industry posted a 95.72 percent year-on-year increase in production in August.

The old economy sector, however, appeared mixed due to uneven strength in recovery, the MOEA's data showed.

In August, production in the machinery industry sector rose 18.65 percent from a year earlier largely because semiconductor suppliers were keen to expand capacity through equipment purchases to meet global AI demand, the MOEA's data showed.

However, the base metal industry suffered a 0.36 percent year-on-year decline in production in August as demand for select products such as hot rolled steel sheets stayed slow, while the chemical material and fertilizer industry also posted a 5.81 percent fall in production on weak demand, with some firms cutting production in response to the market reality, the MOEA said.

Chen Yu-fang (陳玉芳), deputy head of the MOEA's Department of Statistics, said the old economy sector, however, has gradually shown signs of improving since March, as AI development created spill-over effects, allowing select industries to roll out more raw materials used in tech gadgets.

Looking ahead, the MOEA said while the global economy remains impacted by various trade policies and geopolitical unease, Taiwan's exports are expected to continue to benefit from an AI boom, which will boost production in the manufacturing sector.

According to the MOEA, the subindex of the manufacturing sector is expected to range between 146.03 and 150.03 in September, up 22.5-25.8 percent from a year earlier.

(By Tseng Yun-ting and Frances Huang)

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