Taiwan’s manufacturing output last quarter rose 14.09 percent from a year earlier to NT$4.81 trillion (US$150.17 billion), as local tech firms benefited from avid demand for electronics used for artificial intelligence (AI), high-performance computing and cloud data centers, the Ministry of Economic Affairs said yesterday.
The increase also had to do with some non-tech sectors completing inventory adjustments and a low comparison base in the second quarter of last year, the ministry said in a report.
The manufacturing industry carries heavy weight in the nation’s export-oriented economy, as Taiwan is home to the world’s major suppliers of advanced chips, AI servers, storage and memory, among other products.
Photo: CNA
Computer electronics and optical devices posted the biggest increase of 56.89 percent to reach a new quarterly record of NT$410.5 billion, due to the AI frenzy and restocking demand from smartphone brands, the ministry said.
Taiwanese firms are responsible for making camera lenses for Apple Inc’s iPhone series and other global smartphone brands.
Overall output of electronic components totaled NT$1.52 trillion during the April-to-June period, increasing 24.82 percent from a quarter earlier, the ministry said.
Semiconductors grew 37.71 percent to NT$970.7 billion, the sector’s best showing in history, as the AI boom buoyed demand for 12-inch wafers, the ministry said, adding that chip designers and memory product makers also benefited from a windfall.
In contrast, flat panels and related devices were still affected by tepid end-market demand, and their output declined 5.29 percent year-on-year to NT$127.6 billion, it said.
The retreat coincided with lackluster TV and notebook computer sales.
In the non-tech sectors, business picked up modestly, the ministry said.
Industrial output of chemical and fertilizer products grew 11.13 percent, while the base metal sector posted a 6.82 percent increase, it said.
Machinery equipment suppliers reported 4.2 percent growth, attributable to improving demand from semiconductor firms, the ministry said.
Local semiconductor firms are displaying more interest in expanding capacity to meet fast-growing demand for AI-related products from US customers.
Business from China, Taiwan’s largest export destination, has subdued, consistent with the market’s below-par economic performance, government data showed.
Industrial output of auto parts dropped 4.26 percent, as sales of fuel-powered vehicles came under increasing pressure from electronic vehicles, the ministry said, adding that competition from abroad negatively affected business orders.
The US’ restrictive monetary policy looks unfavorable for global trade, as does lingering US-China competition in the technology sector and geopolitical military conflicts, the ministry said.
Fortunately, US technology giants are pouring money into AI development, which is improving business for local firms in their supply chains, it said.
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