Chips boost industry production record

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ESTIMATES EXCEEDED:
While declines were seen in autos and others, tech pushed indexes up as much as 14% last year amid an economic recovery

  • By Lisa Wang / Staff Reporter

The industrial production index hit a new high last month as demand for chips used in 5G, high-performance computing and emerging technologies boosted manufacturing, the economic affairs ministry said yesterday.

The manufacturing production index, a major contributor to the country’s industrial output, rose 10.57 percent last month from a year earlier, beating the ministry’s estimate of a 7-year expansion, 3% to 9.4%.

The ministry attributed this performance to improved supply constraints for key components and raw materials.

Photo courtesy of China Steel Corp

The industrial production index and manufacturing index jumped 13.22% and 14.06% respectively last year, the highest in about a decade, the data showed.

“The manufacturing sector benefited from the global economic recovery last year. Among them, the semiconductor industry showed outstanding performance for the year,” said Deputy Director General of the Statistics Department Huang Wei-jie (黃偉傑).

The ministry expects the current local COVID-19 outbreak to have a minor impact on electronics production, as well as information and communications technology segments, if the plant shutdown in the Taoyuan Farglory Free Trade Zone (遠雄自由貿易港區) is limited to two weeks, Huang said.

The ministry also expects momentum in the manufacturing sector to hold up against a sluggish season expected from this month, forecasting production could fall 2.9% to 5.7% from last month. , a slower drop than an average drop of 6.9%, Huang said.

That would represent annual growth of 7.6% to 10.8%, he said.

Last month, output of electronic components, the largest segment of the manufacturing index, rose 19.87 percent year on year and 5.49 percent month on month, according to ministry statistics.

The semiconductor sub-index jumped 25.79% year-on-year and 9.6% month-on-month.

Production of automotive vehicles and components fell 9.32% a year last month due to shortages of chips and components, although it represented a monthly increase of 3.54%.

Production of petrochemicals contracted by 2.2% per year and 1.44% per month; base metals fell 1.75% per year, but rose 0.09% per month; and the production of the machinery segment increased by 5.38% per year and 3.76% per month.

Separately, retail sales rose 3.7% year on year to NT$368.4 billion ($13.3 billion) last month, led by an 8% annual drop in car sales and two-wheeled vehicles. Fuel sales jumped the most by 21.7% year-on-year due to higher prices last month, the ministry said.

Promotions launched by department stores helped push sales of general-purpose products to an annual growth rate of 6% last month, he added.

Last year, retail sales rose 3.3% to NT$3.99 trillion, with online sales jumping 24.5% year-on-year to NT$430.3 billion.

Restaurant sales rose 7.1 percent year-on-year to NT$77 billion last month, driven by the Christmas holiday and the effect of government-backed stimulus vouchers, the ministry said.

Last year, restaurant sales fell 6.4% to NT$728 billion, marking the second straight year of decline and the biggest drop since 2002.

The ministry expects restaurant business to grow 8.5% to 11.5% annually this month.

Wholesale revenue rose 12.1% last month to NT$1.11 trillion from a year earlier, with machine revenue rising 22.5% to NT$492.1 billion due to strong demand for semiconductor components and price increases, while sales of building materials increased 13.4% to NT$127.8 billion due to plant expansions in manufacturers and rising steel prices.

Last year, wholesale revenue rose 15.8 percent from 2020 to NT$1.22 trillion, with machine revenue climbing 42.6 percent annually, the ministry said.

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