Image Credits: Taipei Times
Taiwan’s industrial production experienced a significant increase of 13.42% in August 2024 compared to the same period last year, fueled by strong demand for electronic components essential for artificial intelligence (AI), high-performance computing, and web-based data centers. The Ministry of Economic Affairs reported that the industrial production index reached 103.27, marking the sixth consecutive month of growth.
Huang Wei-jie, Deputy Director-General of the Department of Statistics, attributed this robust performance to restocking requirements linked to new technology product launches and substantial investments by U.S. tech giants in AI development. While the momentum in industrial production appears sustainable, Huang cautioned that growth may slow slightly in September as some non-tech firms face challenges and opt for maintenance inspections, as indicated by the ministry’s monthly survey.
The electronics sector led the charge, with industrial output soaring by 22.24%, reaching new heights due to rising demand for semiconductors, motherboards, chip testing, packaging, and printed circuit boards. This increase is primarily driven by the popularity of high-performance computing and AI applications. Notably, the production of computer and optical products surged by an impressive 42.56%, bolstered by robust sales of high-end servers and AI-related technologies.
However, the report highlighted struggles in the non-tech sector. The production of base metal products fell by 4.4%, chemical products decreased by 4.51%, and auto parts production plummeted by 12.87%. These declines are attributed to weak end-market demand and adjustments in capacity due to a global economic slowdown, alongside a low comparison base from the previous year. Additionally, the rise of electric vehicles has adversely impacted the auto parts market for traditional gasoline-powered vehicles, reflecting shifting consumer preferences driven by increasing environmental awareness.
For the first eight months of 2024, industrial production remains strong, with an overall increase of 10.98% compared to the same period in 2023. A recent survey of manufacturers revealed that 73.5% expect stable business conditions in September, while 9.2% anticipate a rise and 17.3% foresee a decline. In terms of production value, 87.1% predict steady output, with only a small fraction forecasting an upturn or a retreat.
As Taiwan navigates these mixed signals in industrial performance, the outlook remains cautiously optimistic, particularly within the thriving electronics sector, which continues to be a critical driver of economic growth.