Industrial production index expanded 17.91 percent annually last month to 92.44 as an artificial intelligence (AI) boom continued to fuel demand for chips and servers, the Ministry of Economic Affairs said yesterday.
Manufacturing production index, the major pillar of the nation’s industrial production index, climbed 18.95 percent year-on-year to 92.76, marking a 12th consecutive month of expansion, the ministry said.
In the first two months of this year, industrial and manufacturing production indices expanded 10.88 percent and 11.58 percent to 94.28 and 94.59 respectively, ministry data showed.
Photo: Ritchie B. Tongo, EPA-EFE
Manufacturing production index this month is expected to rise between 10.5 percent and 14.8 percent annually, and grow between 11.2 percent and 12.7 percent this quarter from the first quarter of last year, Department of Statistics Deputy Director-General Huang Wei-jie (黃偉傑) said by telephone.
“AI chips and servers continue to be the main growth drivers, as Taiwan occupies a key global position in supplying hardware,” he said.
Even though Taiwan Semiconductor Manufacturing Co (台積電) and local server makers are under pressure from customers to allocate production to the US to avoid heavy tariffs, the majority of advanced chip manufacturing and high-value server production capacity is to stay in Taiwan, Huang said.
“We should adapt to global supply chain shifts. As long as the pie [market] is growing, the impact should be insignificant,” he said.
In the first two months of the year, production of electronic components grew 17.97 percent as demand for AI and high-performance computing devices continued to boost chip production, chip packaging and wafer testing, the ministry said.
Semiconductor production in the first two months expanded 21.74 percent from a year earlier, the data showed.
Production of computers and optical components in the period surged 30.42 percent on the back of strong demand for AI applications and semiconductor inspection tools, the data showed.
China’s stimulus packages also helped boost smartphone sales, benefiting camera lens production, the ministry said.
Machinery equipment production rose 11.32 percent due to robust demand for advanced semiconductor components, as well as chip cleaning and manufacturing equipment, it said.
However, production of base metals, as well as steel, sank 9 percent in the first two months due to oversupply and price competition in the global market, while chemical materials and fertilizers dropped 1.8 percent from the same period last year amid weak demand and intensifying competition from global peers, it said.
Production of automotive products in January and last month declined 11.62 percent due to component shortages and competition from imported goods, it said.
Output of sedans, electric vehicles and commercial vehicles dropped from a year earlier, the ministry added.
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