Taiwan’s economic activity last month continued to gain support from demand for artificial intelligence (AI) applications, but some manufacturing industries remained weak while momentum in the service sector slowed, an electricity consumption survey by the Taiwan Research Institute showed yesterday.
The Electricity Prosperity Index compiled by the New Taipei City-based institute edged up 0.07 percent last month from a year earlier, with overall electricity consumption signaling a stable “green” light for the fourth straight month, the institute said in a statement.
However, softening export orders for some traditional industries and slowing momentum in private consumption partially offset the growth momentum driven by demand for high-performance computing (HPC) and AI applications last month, the institute said.
Photo: Sam Yeh, AFP
As a result, Taiwan’s economy likely expanded 5.6 percent year-on-year last month and 5.5 percent in the first quarter, it said.
The institute uses the Electricity Prosperity Index to gauge the health of the nation’s manufacturing and service sectors.
Last month, use of high-voltage power increased 0.04 percent year-on-year, with demand from the service sector rising 0.53 percent while that from the manufacturing sector slid 0.03 percent, it said.
Power consumption by semiconductor firms last month rose 5 percent from a year earlier on strong demand for HPC and AI chips, it said, adding that the chip foundry business is expected to recover at a moderate pace, while the semiconductor industry as a whole could grow slower than expected amid the geopolitical uncertainties.
Electricity consumption by chemicals producers fell 6.7 percent annually last month due to sluggish global demand, capacity expansion by Chinese petrochemical firms and Beijing ending tariff reductions for some Taiwanese imports under the Economic Cooperation Framework Agreement (ECFA), the institute said.
Suppliers of plastic and rubber products were also affected by Beijing’s cancelation of preferential tariffs under the ECFA deal and stagnant end-product demand, with their electricity use declining 5.1 percent last month compared with the same period last year, it said.
The institute projected that slowing private consumption would hit service providers, such as retailers, restaurants, hotels and recreational facilities, which would no longer play a major role this year in boosting the nation’s economy amid the global economic and geopolitical turmoil.
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