Industrial production increased for the second month in a row in April

Taipei, May 24 (CNA) Strong demand for new technologies such as artificial intelligence applications boosted industrial production in Taiwan for the second straight month in April, according to the Ministry of Economic Affairs (MOEA).

The local industrial production index rose 14.61 percent from a year earlier to 87.70 in April, after rising 4.20 percent in March, data compiled by MOEA showed.

The data showed that the sub-index for the manufacturing sector, which accounts for more than 90 percent of Taiwan’s total industrial output, also rose 14.90 percent from a year earlier to 87.30.

On a monthly basis, the industrial production index fell by 5.65 percent, and the sub-index for the manufacturing sector also fell by 5.77 percent, according to MOEA data.

According to MOEA, in the first four months of 2024, the industrial production index increased by 8.11%. compared to the previous year to 87.63, and the sub-index for the manufacturing sector increased by 8.26%. to 87.27.

Huang Wei-jie (黃偉傑), deputy head of MOEA’s Department of Statistics, said the boom in artificial intelligence development has significantly increased global demand for technology gadgets, providing support to export-oriented Taiwanese manufacturers of electronic components, computers and optoelectronics.

The production index of Taiwan’s electronic components sector rose 23.01 percent in April from a year earlier, while the semiconductor suppliers sub-index rose 30.44 percent, mainly due to strong demand for 12-inch chips supplied by pure wafer foundries. “play.”

According to Huang, the semiconductor index’s rise in April was the industry’s highest year-over-year gain in almost three years.

Despite the good economic situation, in April the production rate of flat panel and component manufacturers fell for the third month in a row, by 8.68% compared to the previous year. Huang said the decline came as the consumer electronics market showed no significant recovery.

The production index for the computer and optoelectronics industry rose 37.14 percent in April from a year earlier, reaching a new record of 116.87, MOEA said.

Huang said the increase reflected large shipments of AI servers, which are more expensive than traditional servers, and moves by Taiwanese manufacturers in China to shift some of their resources back to Taiwan.

According to MOEA, the old sector of the economy largely reversed its previous weakness, recording an increase in production in April.

In the machinery industry, the production rate rose 8.21 percent from a year earlier in April, supported by an increase in equipment purchases by semiconductor makers looking to expand production capacity and a relatively low benchmark in April 2023, MOEA said.

The production index of the chemical raw materials and fertilizers sector rose 5.07 percent from a year earlier in April as foreign buyers began to rebuild inventories, while the index for the auto and auto parts sector rose 0.43 percent year-on-year due to growth number of electric vehicles and exports of car lamps.

However, the base metals industry’s production index fell 4.41 percent in April from a year earlier as cheap steel products disrupted the global steel market, causing many suppliers to cut production.

Huang said the rising popularity of artificial intelligence applications is expected to continue to drive Taiwan’s high-tech sector, forecasting that the manufacturing sector’s output index will increase by 6.7-11.4 percent in May to between 89.63 a 93.63.

Still, Huang cautioned that persistent inflation, high interest rates, ongoing trade tensions between the United States and China, and geopolitical uncertainty could negatively impact the global economy in the future.