The industrial production index rose 4.48 percent year-on-year to 135.28 last month, underpinned by robust demand for chips used in 5G-related devices, cloud-based servers and automotive chips, the Ministry of Economic Affairs said yesterday.
Last month’s figure marked the best May performance and grew for the 28th consecutive month on an annual basis, the ministry said.
In addition, the manufacturing production index — a major contributor to industrial production — climbed 5.41 percent from the preceding year, it said.
“The semiconductor sector showed strong growth momentum last month, which is attributable to rising demand for cloud-based servers as more manufacturers increased automation lines, bolstering demand for data collection and storage,” Department of Statistics Deputy Director-General Huang Wei-jie (黃偉傑) said by telephone.
“Besides, demand for chips used in automotive electronics and 5G devices continued to grow stably, which helped offset weakness in consumer electronics,” Huang said.
As the impact of inflation magnifies, the ministry expects the manufacturing production index to be flat or to grow 3 percent annually to between 137.16 and 141.16 this month.
“Manufacturers are seeing customers turn conservative about placing new orders as they are digesting inventories,” he said.
Companies have built up excess inventories amid fears of key component shortages and logistics turbulence due to the COVID-19 pandemic.
On a monthly basis, the manufacturing production index could decline 0.2 percent sequentially in a worst-case scenario, or grow 2.7 percent in a best-case scenario, the ministry said.
“We are still bullish about the manufacturing sector’s outlook. It is more likely that manufacturing will sustain sequential growth,” Huang said.
As China has gradually lifted its COVID-19-related restrictions, demand from that country could pick up and lead to an increase in orders, he said.
Electronic component production climbed 14.17 percent annually last month, led by the semiconductor sub-index, which expanded 22 percent year-on-year.
The manufacturing of display and related products fell at a faster rate of 19.83 percent annually compared with April’s 14.6 percent decline, ministry data showed.
The production of computers and other electronics grew 3.76 percent last month, driven by demand for servers, routers and wireless communications equipment, as well as an easing of the component shortage, the ministry said.
The petrochemicals sector saw production shrink 6.67 percent year-on-year, mainly due to reduced demand for products to counter COVID-19 infections, factory shutdowns for annual maintenance, as well as China’s lockdowns.
China absorbs about 40 percent of Taiwan’s petrochemical exports.
China’s COVID-19-related curbs and new output depressed demand for Taiwanese goods, with rubber materials, polypropylene, ethylene glycol and acrylonitrile butadiene styrene (ABS) suffering the brunt.
The machinery sector saw production contract 1.23 percent annually last month, which the ministry attributed to China’s slowing economy and excess inventory. About 30 percent of machinery tools made in Taiwan are shipped to China.
The production of basic metals slid 3.84 percent year-on-year last month, as major steelmakers suspended production due to annual maintenance and China’s COVID-19 curbs curtailed demand for copper foil and steel billet.
Meanwhile, the production of vehicle and auto components plummeted 16.17 percent as uneven supplies of key components, including chips, deepened due to China’s lockdowns, the ministry said.
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