In May, Taiwan’s industrial production surged to a year-on-year growth rate of 16.1%, up from 14.5%, significantly surpassing both market expectations (8.5% YoY) and our more optimistic forecast of 10% YoY. This growth rate in May marked the highest level since July 2021, influenced by pandemic-related base effects.

The robust performance of Taiwan’s industrial production was notably driven by specific sectors. Computers, electronics, and optical products led with a year-on-year increase of 31.8% for the second consecutive month in May. Electronic parts and components also showed strong growth at 29.3% YoY, buoyed by a 41.0% YoY increase in the semiconductor subindex. Semiconductors, which constitute more than a third of Taiwan’s total industrial production, have been pivotal amid increased demand fueled by advancements in artificial intelligence.