The industrial production index fell 12.45 percent annually last year after it fell by a faster-than-expected 3.99 percent last month amid a shortage of artificial intelligence (AI) chips from Nvidia Corp, which curtailed server production, while inventory adjustments at foundry and printed circuit board firms continued, the Ministry of Economic Affairs said yesterday.
The index gauges output in Taiwan’s four main industries: manufacturing, electricity and gas supply, water supply, and mining and quarrying.
The manufacturing production index, which contributed 95.41 percent to the industrial production index, dropped 4.19 percent annually last month, the 19th month of consecutive falls, a record, the ministry said.
Photo: Ritchie B. Tongo, EPA-EFE
Last month’s decline meant that the manufacturing index was down 12.88 percent last year, down for a second consecutive year and the severest slump on record, it said.
The production index for electricity and gas supply dropped 3.7 percent from a year earlier, while the indices for water supply, and mining and quarrying were down 2.15 percent and 3.47 percent respectively, it said.
The ministry has a more optimistic view about industrial and manufacturing output this year, due to robust demand prospects for semiconductors and servers, Department of Statistics Deputy Director-General Huang Wei-jie (黃偉傑) said by telephone.
Taiwan Semiconductor Manufacturing Co (台積電), the world’s biggest contract chipmaker, last week forecast that revenue this year would grow to as much as 25 percent annually, outperforming the global semiconductor industry’s expected expansion of 10 percent.
“A rebound in demand for semiconductors will be one of the major driving factors” of the global situation, Huang said.
“Smooth server shipments will be another as Chinese output of less-advanced artificial-intelligence chips increases and supply chain inventory digestion nears an end,” he said, adding that semiconductors and servers make up more than 40 percent of overall manufacturing production.
This month, the manufacturing production index is expected to grow by 9.6 to 14.7 percent due to a nascent economic revival and a lower comparison base last year, he said.
However, the Red Sea crisis poses a new concern, given that longer transportation times and higher shipping costs would lead to higher prices, reigniting inflation risks, and weighing on export orders and manufacturing output, he said.
Last year, electronic components production — which mainly comprises semiconductors and flat panels used in PCs and TVs — plummeted 17.39 percent annually, while the production of computers and optical components, mainly camera lenses, dropped 0.19 percent from the previous year, ministry data showed.
Output of base metals, including steel, fell 9.48 percent and output of petrochemicals sank 11.82 percent, while machinery output fell 17.35 percent and automotive-related products were down 1.06 percent annually last year, the data showed.
Semiconductor shares in China surged yesterday after Reuters reported the US had ordered chipmaking giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to halt shipments of advanced chips to Chinese customers, which investors believe could accelerate Beijing’s self-reliance efforts. TSMC yesterday started to suspend shipments of certain sophisticated chips to some Chinese clients after receiving a letter from the US Department of Commerce imposing export restrictions on those products, Reuters reported on Sunday, citing an unnamed source. The US imposed export restrictions on TSMC’s 7-nanometer or more advanced designs, Reuters reported. Investors figured that would encourage authorities to support China’s industry and bought shares
TECH WAR CONTINUES: The suspension of TSMC AI chips and GPUs would be a heavy blow to China’s chip designers and would affect its competitive edge Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is reportedly to halt supply of artificial intelligence (AI) chips and graphics processing units (GPUs) made on 7-nanometer or more advanced process technologies from next week in order to comply with US Department of Commerce rules. TSMC has sent e-mails to its Chinese AI customers, informing them about the suspension starting on Monday, Chinese online news outlet Ijiwei.com (愛集微) reported yesterday. The US Department of Commerce has not formally unveiled further semiconductor measures against China yet. “TSMC does not comment on market rumors. TSMC is a law-abiding company and we are
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
RSS