The industrial production index expanded 10 percent year-on-year last month, the Ministry of Economic Affairs said yesterday, attributing the increase to strong production of electronic components on brisk demand for chips used in 5G, high-performance computing and the Internet-of-Things devices.
The manufacturing sector, a major contributor to Taiwan’s industrial production, expanded 10.69 percent year-on-year, making last month the sector’s best January ever, the ministry said.
On a monthly basis, the sector showed stronger-than-expected momentum, reporting a slow-season decline of 1.17 percent, compared with the ministry’s estimated downturn of 2.9 to 5.7 percent.
Photo: Ritchie B. Tongo, EPA-EFE
“The annual growth in January was fueled by robust demand for electronic components, semiconductors in particular. The electronic component segment contributed more than half of the total manufacturing production,” Department of Statistics Deputy Director-General Huang Wei-jie (黃偉傑) yesterday told the Taipei Times by telephone.
Despite major chipmakers increasing capacity, the ministry expects the nation’s manufacturing production to decelerate by 7.9 to 11.6 percent annually this month, Huang said, attributing the estimate based on a survey conducted by the ministry to fewer working days due to the Lunar New Year holiday.
The Russia-Ukraine conflict would have no direct effect on Taiwan’s trade in the short run, Huang said, citing local firms’ minimal exposure in those countries.
Electronic components production, the largest segment of the manufacturing index, last month jumped 21.22 percent year-on-year, or 2.4 percent month-on-month, to an all-time high, ministry data showed.
The electronic components index’s semiconductor subindex surged 27.21 percent year-on-year, or 3.73 percent month-on-month, the strongest growth on the index, the data showed.
The production of computers and other electronics expanded 5.01 percent annually, as component shortages eased, and demand for data centers, networking equipment and other computer parts increased, the ministry said, but added that the segment dipped 10.54 percent from the previous month amid the slow season.
The petrochemical sector’s production shrank 6.74 percent year-on-year and 1.63 percent month-on-month as demand for COVID-19 protection products receded, the data showed.
The production of basic metals slumped 13.71 percent annually, or 9.46 percent month-on-month, due to inventory correction and steelmakers shutting down some furnaces for maintenance, the ministry said.
Machinery production jumped 12.97 percent year-on-year, driven by demand from local semiconductor companies’ significant capacity expansion, 5G infrastructure projects and automation equipment, it said, but added that the segment shrank 7.28 percent month-on-month last month.
The production of vehicles and automotive components last month dropped 4.28 percent annually, or 3.6 percent month-on-month, due to a higher basis last year and an unresolved chip shortage.
Separately, the ministry said that retail sales rose 6.4 percent annually and 6.5 percent month-on-month to NT$392.2 billion (US$14.07 billion), marking an all-time high due to Lunar New Year holiday shopping.
Sales of food, drinks and tobacco grew 18.4 percent annually last month, while supermarket sales rose 17.1 percent annually and the clothes and apparel segment grew 15.7 percent annually, the ministry said
Fuel sales jumped 14.7 percent year-on-year, the ministry said.
Restaurant sales climbed 8.7 percent annually to NT$76.2 billion, but were down 0.9 percent month-on-month, the ministry said, adding that a spike in COVID-19 cases had little effect on the sector, as restaurants focused on takeout deals to mitigate canceled bookings.
The ministry said that rising consumer prices had little effect last month.
“Consumers are still willing to spend during the holiday season,” Huang said.
The ministry expects restaurant sales to rise 3 to 7 percent annually this month, while retail sales are expected to climb 1 to 4 percent year-on-year.
Wholesale revenue rose 11.9 percent last month to NT$1.11 trillion from a year earlier, with revenue of machinery including computers and servers growing 15.8 percent to NT$473.2 billion, the ministry said, attributing the trend to strong demand for 5G applications, automotive components and high-performance computing products.
Construction material revenue climbed 16.7 percent year-on-year last month to NT$120.1 billion due to robust real estate market and vehicle sales, it said.
This month, wholesale revenue is expected to expand up to 16 percent year-on-year, but would dip as deep as 18 percent month-on-month, the ministry said.
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