The industrial production index in January increased 15.98 percent year-on-year, the Ministry of Economic Affairs reported yesterday, ending 19 months of consecutive declines.
Industrial production measures the change in the value of output produced by manufacturers, utilities and mines.
The ministry attributed the increase to improvements in manufacturing, mining, and electricity and gas supply output, coupled with a less serious deterioration in water supply output.
Photo courtesy of Techman Robot Inc
Manufacturing output, which accounted for 95.41 percent of the index, rose 16.63 percent annually in January, also ending a 19-month downtrend, the report said.
Output received a lift from robust demand for artificial intelligence (AI) applications, high-performance computing (HPC) and cloud data services, as well as the effect of firms stocking up ahead of the Lunar New Year holiday, it said.
However, the better-than-expected readings for industrial and manufacturing output were in part due to a lower comparison base, as the Lunar New Year holiday fell in January last year, which reduced the number of working days then, it said.
The ministry remains optimistic about a steady recovery in industrial and manufacturing output this year, thanks to robust demand prospects for AI, HPC, automotive electronics and high-end chips, the report said.
However, inflationary risks, the US-China rivalry, the Russia-Ukraine war and the Red Sea crisis would continue to weigh on the global economy, the ministry said, adding that a survey of local manufacturers found that production is expected to fall this month by 1.3 percent to 6.3 percent from a year earlier.
The computer and optical products industry reported the largest output increase of 35.3 percent in January, on the back of strong demand for servers, computer peripherals and handset camera lenses, ministry data showed.
The electronic components industry — which mainly comprises semiconductors and flat panels, and accounts for 49.57 percent of total manufacturing output — rose 10.73 percent, ending 16 months of consecutive declines, the report said.
In traditional industries, the effect of pre-holiday stocking helped boost output for base metals by 19.8 percent, chemical materials and fertilizers by 8.88 percent, and machinery manufacturers by 19.41 percent, the report said.
The automobile and auto parts industry remained a standout among traditional industries, with output surging 42.52 percent in January from a year earlier, mainly due to strong sales of several new vehicle models and rising orders for auto parts, it said.
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Huawei Technologies Co’s (華為) latest smartphones carry a version of the advanced made-in-China processor it revealed last year, results from an independent analysis showed. This underscored the Chinese company’s ability to sustain production of the controversial chip. The Pura 70 series unveiled last week sports the Kirin 9010 processor, research firm TechInsights found during a teardown of the device. This is a newer version of the Kirin 9000s, made by Semiconductor Manufacturing International Corp (SMIC, 中芯) for the Mate 60 Pro, which had alarmed officials in Washington who thought a 7-nanometer chip was beyond China’s capabilities. Huawei has enjoyed a resurgence since