Taiwan’s industrial production last month rose 5.07 percent from a year earlier, as local technology firms benefited from strong demand for electronic components used in artificial intelligence (AI) and high-performance computing applications, the Ministry of Economic Affairs said yesterday.

Industrial production measures the change in the value of output produced by the local manufacturing, mining and utilities sectors.

Last month, the industrial production index was 96.31, with manufacturing output — which accounted for 95.29 percent of the industrial production index — rising 5.29 percent to 96.4, up for the 11th consecutive month to the second highest in history, it said.

The strong showing came as robust demand for AI and high-performance computing applications, and big data centers offset fewer working days linked to the Lunar New Year, Department of Statistics Deputy Director-General Huang Wei-chieh (黃偉傑) said.

Within the technology space, electronic components output increased 16.67 percent year-on-year, while production in the IC sector surged 22.92 percent to an all-time high, the ministry said.

The rapid growth was the result of a sustained expansion in 12-inch wafer foundry production, as US technology giants showed keen demand for chips used in high-performance computing and AI applications, it said.

As AI grows increasingly prevalent and demand for Web-based services rises, more investment would flow to the semiconductor industry, it said.

That explained why the production index for computer, electronics and optical products rose 14.78 percent to a record high, indicating that local AI server suppliers operated during the Lunar New Year holiday to meet demand, the ministry said.

While tech firms thrived, non-tech companies took a hit from reduced working days, low-price competition from overseas and production maintenance, it said.

Output for basic metals, chemicals and fertilizers, machinery equipment, and vehicles and auto parts all fell, with annual decreases of 2.1 to 27.2 percent, it said.

AI-driven demand is expected to lend further support to technology products, Huang said, adding that this month’s manufacturing production index is forecast to grow between 18.6 and 23.7 percent.

For the first two months of the year, growth is expected to range from 11.4 percent to 13.8 percent, meaning that the seasonal weakness in the first quarter might not be conspicuous, Huang said.

Non-tech products could also contribute with their slowdown stabilizing, the ministry said.

However, Huang declined to speculate on the timeline of recovery for non-tech sectors, saying it would depend on when the spillover effect of China’s overproduction ends.



Taipei Times / Crystal Hsu