Soaring Production of Electronic Components & Semiconductors Amidst a Slump in Automotive Products
Increase in manufacturing output by 13.65%
An unexpected surge in the production of electronic components and semiconductors, by nearly 20% and 24% respectively, has been noted in Taiwan. However, the production of automotive products has seen a significant drop by 11.18%.
By Meryl Kao / Staff reporter
In a surprising turn of events, the industrial production index for last month surged 13.65% year-on-year to reach 106.1, marking a three-month high and a 11.95% increase in the first quarter. This growth can be attributed to robust demand for artificial intelligence (AI) and high-performance computing (HPC) applications, as reported by the Ministry of Economic Affairs.
The manufacturing production index, the backbone of the industrial production index, also registered a 14.71% year-on-year increase, climbing to 106.89, marking the 13th consecutive month of expansion. The index for next month is expected to rise between 14.4% and 19%, according to Department of Statistics Deputy Director-General Huang Wei-jie.
Despite uncertainties regarding future US tariffs on Taiwanese goods, the growth in the AI sector shows no signs of slowing, with a positive forecast for the industry. The production of electronic components witnessed a 20.39% increase in the first quarter compared to the previous year, owing to the strength of AI and HPC businesses. Semiconductor production grew by an impressive 24.19%, thanks to a strong demand for 12-inch wafers, chip designing, testing, and packaging services, and flat panels. The sharp increase in semiconductor production can partially be attributed to front-loading demand by US clients ahead of US President Donald Trump's tariffs on Taiwanese semiconductors.
In contrast, the production of automotive products decreased by 11.18% in the first quarter, primarily due to a decline in orders. When domestic vehicle inventory reduces, the demand for related auto components also tends to decrease, as mentioned by Huang. Furthermore, stiff competition from foreign auto manufacturers played a significant role in the output decline.
The production of base metals, such as steel, sank 7.11% in the first quarter due to disruptions in the global steel recovery. Some manufacturers even suspended operations for repairs and maintenance of production equipment. The output in chemical materials and fertilizers also dropped by 2.63% during the period, with temporary shutdowns for maintenance or due to weak demand.
On a positive note, the rise in electronics manufacturing can be linked to strategic expansions by companies, innovative advancements, technological supremacy, burgeoning global market demand, and favorable geopolitical circumstances. Although the reasons for the decrease in automotive products production are not explicitly stated, potential considerations include global economic shifts, industry diversification, and supply chain disruptions. For a more precise explanation of the decline, specific data pertaining to Taiwan's automotive sector is required.
- The unexpected surge in the production of electronic components and semiconductors in Taiwan's manufacturing industry can be partly attributed to the strong demand for artificial intelligence (AI) and high-performance computing (HPC) applications.
- The growth in the AI sector shows no signs of slowing, with the manufacturing production index for electronic components witnessing a 20.39% increase in the first quarter compared to the previous year.
- Semiconductor production grew by an impressive 24.19%, thanks to a strong demand for 12-inch wafers, chip designing, testing, and packaging services, and flat panels. This increase partly resulted from front-loading demand by US clients ahead of US President Donald Trump's tariffs on Taiwanese semiconductors.
- The production of automotive products, however, decreased by 11.18% in the first quarter, primarily due to a decline in orders and stiff competition from foreign auto manufacturers.
- Despite the slump in automotive products, the manufacturing industry appears to be capitalizing on opportunities presented by the growth in electronics, driven by strategic expansions, innovative advancements, technological supremacy, burgeoning global market demand, and favorable geopolitical circumstances.
