The manufacturing sector benefited from sustained demand for artificial intelligence (AI) and high-performance computing (HPC) applications, which continued to support industrial activity at the start of the year, a report released yesterday by the Taiwan Institute of Economic Research (台灣經濟研究院) showed.
The manufacturing business climate indicator rose to 13.81 points in January, up 1.32 points from 12.49 in December last year, lifting the sector’s “yellow-blue” — which indicates sluggish conditions — to “green,” signaling steady growth.
The largest contribution came from the input reading, which increased by 1.13 points, suggesting stronger production and procurement activity.
Photo: Ritchie B. Tongo, EPA
The demand gauge also rose by 0.66 points, indicating a modest uptick, the report said.
However, the operating environment measure fell by 0.36 points, while cost and selling price components declined by 0.07 points and 0.05 points respectively, pointing to some lingering uncertainty in the broader business climate, it said.
The proportion of industries flashing “blue,” which indicates a recession, dropped sharply from 46.60 percent to 19.72 percent, indicating a significant reduction in sectors experiencing contraction, the report said.
More notably, the share of industries with a “green” light jumped from 12.06 percent to 31.95 percent — the largest among all categories — as more manufacturers and firms outside the core AI supply chain displayed signs of stabilization, it said.
In the electronic components sector, demand tied to AI applications, HPC and cloud services remained strong, resulting in double-digit annual growth in exports, export orders and industrial production, the report said.
In the base metals industry, demand for products such as copper foil and copper-clad laminates — key materials used in AI-related hardware — also rose, it said.
Together with the continued increase in global copper prices, this trend supported order momentum and shipments for manufacturers in the sector, it added.
The food industry also posted improved performance, the report said, adding that stronger demand from China and Southeast Asia, combined with seasonal Lunar New Year purchases, helped lift overall activity.
Additional support came from an increase in concerts and promotional events tied to political primary polling ahead of the local elections scheduled for November, the report said.
In the automobile and auto parts sector, demand from North America for components such as collision-related parts increased.
This expansion boosted indicators related to raw materials and production activity, it said.
Despite some weakness in cost and operating environment indicators, the report suggested that Taiwan’s manufacturing sector entered this year on firmer footing, supported by resilient technology demand and improving conditions across a wider range of industries.
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