The industrial production index last month slid 2.32 percent year-on-year to 92.29, the slowest pace of decline in about year, aided by vigorous demand for artificial intelligence (AI) chips, servers and high-performance computing (HPC) devices, the Ministry of Economic Affairs said yesterday.
While the index dipped for a 17th month in a row on an annual basis, it reached its highest level since December last year, the ministry said, attributing the improvement to the nation’s robust AI supply chain and forecasting that the annual decline would soon end.
“There is a good chance that the index would swing back to growth on an annual basis in January next year, given a lower comparison basis in January this year due to the Lunar New Year holiday,” Department of Statistics Deputy Director-General Huang Wei-jie (黃偉傑) said by telephone.
Photo: Tien Yu-hua, Taipei Times
PROMISING SIGNS
“Besides, we have seen a clear trend indicating a significant improvement in industrial production in the past few months, boding well for the index to emerge from inventory-driven negative growth in the first quarter of next year,” Huang said.
A key indicator is that semiconductor output returned to annual growth of 0.37 percent last month, snapping 13 months of declines since September last year, he said.
Demand for 12-inch wafers was the bright spot last month, as chipmakers benefited from strong demand for AI chips and HPC devices, the ministry said.
Rising demand for large TV panels also helped, it said.
The growth in semiconductor output helped bring overall production of electronic components near the breakeven point last month.
The production of electronic components, which mainly comprises semiconductors and flat panels, shrank 0.65 percent annually last month, the mildest reduction in about 12 months, ministry data showed.
Electronic components made up about half of total manufacturing output.
TRADITIONAL INDUSTRIES
Manufacturing production this month is expected to drop between 1.2 percent and 5.5 percent year-on-year to between 93.28 and 89.28, the ministry forecast, based on a survey on local manufacturers.
“With macroeconomic recovery remaining in the doldrums, it would be difficult to see a significant improvement in traditional segments such as machine tools and equipment,” Huang said.
A higher comparison base in November last year would also be a factor, he said.
“Manufacturers produced as many components as they could last year to cope with supply constraints. That resulted in an inventory glut as demand plunged,” he said.
Last month, the production of computers and optical components gained 12.51 percent annually, the fastest rate in more than a year, fueled by increasing demand for servers, cloud-based applications and camera lenses used in smartphones from Apple Inc and Chinese mobile phone brands such as Huawei Technology Co (華為) and Xiaomi Corp (小米).
The production of basic metals, mostly steel, sank 4.6 percent year-on-year last month, as steel mills cut production to cope with weak steel demand.
The petrochemical sector saw production fall 5.18 percent year-on-year last month due to dwindling demand in an inventory-driven down cycle.
Machine tools output plummeted 17.64 percent year-on-year as businesses were reluctant to invest in new manufacturing equipment due to economic uncertainty.
The production of automotive-related products rose 2.37 percent annually last month, attributable to new vehicle launches and improved chip supply, the ministry said.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in