Hon Hai shareholders listen to an introduction of an AI server displayed at the company in New Taipei on May 31, 2024. Photo: CNA

Taipei, June 24 (CNA) Taiwan’s industrial production grew for the third consecutive month in May as the export-oriented manufacturing sector received a boost from global demand for emerging technologies such as artificial intelligence applications and high performance computing (HPC) devices, the Ministry of Economic Affairs (MOEA) said Monday.

Data compiled by the MOEA showed the country’s industrial production index rose 16.06 percent from a year earlier to 98.20 in May, following a 14.48 rise percent in April.

In May, the manufacturing sector sub-index, which accounts for more than 90 percent of Taiwan’s total industrial production, rose 16.70 percent from a year earlier to 98.05, also marking the third straight monthly year-on-year increase, the data indicated.

In the first five months of this year, Taiwan’s industrial production index and manufacturing sub-index rose 9.72 percent and 9.99 percent, respectively, to 89.72 and 89.41, according to the MOEA.

Solid demand for AI and HPC gadgets pushed up production in the electronic components industry by 29.31 percent from a year earlier in the wake of an increase in output of products such as 12-inch wafer foundry services and motherboards, the MOEA said.

In addition, emerging technologies also boosted production of dynamic random access memory (DRAM) memory chip suppliers and IC designers in the electronic components industry in May, the ministry added

In the current AI boom, production in the computer and optoelectronics industry rose 31.84 percent from a year earlier to hit a historic high on the back of increases in shipments of servers, smartphone camera lenses used in handheld devices and inspection machinery for automation and semiconductor equipment, the MOEA said.

While the tech sector remained strong, the old economy sector was mixed, MOEA data showed.

“Judging from the data, the strength of the global economic recovery stayed uneven and the pace of the recovery remained unstable,” Huang Wei-jie (黃偉傑), deputy head of the MOEA’s Department of Statistics, said.

Select industries in the old economy sector benefited from a relatively low comparison base in May 2023 and saw production grow, while their clients started to rebuild inventories to boost production in May 2024, according to the ministry.

Production generated by the base metal industry rose 7.24 percent from a year earlier in May, and the chemical materials and fertilizer industry also posted a 4.87 percent year-on-year increase in production in the month, the MOEA said.

Bucking the upturn, the machinery industry fell 0.26 percent from a year earlier in May as many manufacturers remained cautious about further expansion in a slow global economic recovery, the ministry added.

In addition, production by the auto and auto parts industry fell 9.09 percent from a year earlier in May, as the fuel-powered small sized passenger car market was impacted by electric vehicles to some extent, the MOEA said, adding that the fall in production also reflected a drop in export orders for auto parts.

The global economy remained haunted by high inflation and interest rates, escalating trade tensions between the United States and China as well as growing geopolitical unease, the MOEA said.

However, AI and HPC devices are expected to continue to help Taiwan’s exporters and push up production in the local manufacturing sector, the ministry added.

“Taiwan boasts a strong semiconductor industry and solid server production, helping itself weather the impact of these negative external factors,” Huang said.

The production sub-index of the local manufacturing sector is expected to grow 12.5-17.3 percent from a year earlier to 92.5-96.5 in June, marking the fourth consecutive month of growth, he added.