Taiwan's Industrial Production Soars for 13th Straight Month, Fueled by AI Boom

Artificial Intelligence Drives Record-Breaking Manufacturing Growth in Taiwan

Taipei, Taiwan – Taiwan's industrial production continues its remarkable ascent, climbing for the 13th consecutive month in March. The Ministry of Economic Affairs (MOEA) announced that industrial production surged by over 13 percent compared to the previous year, driven largely by the burgeoning artificial intelligence (AI) sector.

The MOEA's data reveals that Taiwan's industrial production index reached an all-time high for March, hitting 106.10, a 13.65 percent increase year-on-year. The manufacturing sector, representing over 90 percent of total production, saw its sub-index rise by 14.71 percent to 106.89, also marking the 13th straight month of expansion.

In the first quarter of the year, Taiwan's industrial production index grew by 11.95 percent, reaching 98.30. The manufacturing sub-index experienced a 12.79 percent increase, reaching 98.77.

According to Huang Wei-jie (黃偉傑), deputy head of the MOEA's Department of Statistics, the local tech sector benefited significantly from the expanding demand for AI applications, high-performance computing (HPC) devices, and cloud services during March.

While some Taiwanese firms expedited orders due to potential tariff concerns, AI development remained the primary catalyst for production growth, Huang stated.

The electronic components industry witnessed a significant 25.07 percent year-on-year surge, spurred by robust AI and HPC demand. This led to increased inventory building by businesses such as pure-play wafer foundries, IC design, IC packaging, testing, and motherboard firms, the MOEA reported.

The computer and optoelectronics industry also performed strongly, with production up 21.22 percent year-on-year. Increased shipments of servers, communication equipment, mobile camera lenses, and semiconductor equipment testing devices, fueled by robust demand for AI applications and cloud services, played a crucial role, the MOEA added.

However, traditional industries generally faced production declines in March due to escalating price competition, oversupply in global markets, and cautious business outlooks from clients, Huang noted.

The base metal, chemical material and fertilizer, and auto and auto part industries experienced year-on-year production declines of 4.78 percent, 3.94 percent, and 10.82 percent, respectively, according to the MOEA.

The double-digit drop in the auto and auto part industry reflected component shortages and production line adjustments by certain car manufacturers, the MOEA said.

Countering the downturn in the old economy sector, the machinery industry saw a 7.57 percent year-on-year production increase, driven by enhanced shipments as semiconductor suppliers expanded their advanced technology capacity to meet global market demand, the MOEA added.

Looking ahead, the AI boom is anticipated to further invigorate advanced semiconductors and high-tech servers, thereby continuing to propel Taiwan's industrial production, the ministry projected.

Nonetheless, the MOEA cautioned that U.S. trade policies and geopolitical instability will continue to introduce uncertainty into the global economy.

The ministry forecasts that the sub-index for the local manufacturing sector for April will range from 100.24 to 104.24, indicating a year-on-year increase of 14.4 to 19.0 percent.