Taiwan’s industrial production falls for 4th straight month in December

Taiwan's industrial production fell year-on-year for the fourth consecutive month in December amid weakening end-user demand worldwide, though the industrial production index for 2022 still hit a new high, the Ministry of Economic Affairs (MOEA) said Wednesday.

Data compiled by the MOEA showed the December industrial production index moved lower by 7.93 percent from a year earlier to 129.62 after a 5.55-percent decline in November, with the manufacturing sector sub-index, which accounts for more than 90 percent of the total production, falling by 8.40 percent to 131.99, also marking the fourth straight month of a year-on-year decline.

In 2022, Taiwan's industrial production index rose by 0.88 percent from a year earlier to a record high of 132.87 in the booming first half of the year with the manufacturing sector sub-index also rising by 0.89 percent to a new high of 135.05, the data indicated.

In the fourth quarter of last year, the country's industrial production index fell by 5.94 percent from a year earlier and also dropped by 5.18 percent from a quarter earlier, while the sub-index of the manufacturing sector declined by 6.22 percent year-on-year and also fell by 4.67 percent on a quarterly basis, the MOEA said.

Speaking with reporters, Huang Wei-chieh (???), deputy director of the MOEA's Department of Statistics, said Taiwan's exports-oriented economy still felt the impact from weakening global demand.

"For the tech sector, inventory adjustments started in the fourth quarter of last year," Huang said. "The impact from inventory adjustments on the old economy sector continued after beginning in the second quarter."

"The fall in industrial production of the manufacturing sector was in line with our expectations," Lin added, referring to an earlier estimate of a 7.0 percent-9.7 percent year-on-year drop made by the MOEA.

In December, production in the electronics component industry fell by 4.94 percent from a year earlier on continued inventory adjustments, but semiconductor suppliers saw production increase by 3.46 percent on the back of strong demand for chips made on high-end processes, which boosted shipments of 12-inch wafers, the MOEA said.

However, flat-panel makers in the electronics component industry saw their production tumbling by 47.63 percent from a year earlier in December due to a fall in demand for consumer electronics products, the MOEA added.

Bucking the downturn in overall industrial production, the computer and optoelectronics industry posted a 0.30-percent year-on-year increase due to solid demand for devices used for cloud-based applications, while the impact from a shortage in production materials eased to some extent which lent some support to the industry, the MOEA's data showed.

Outside the tech sector, production in the chemical raw materials, base metal, and machinery industries all dropped by a double digit pace, falling by 23.45 percent, 22.27 percent, and 13.12 percent, respectively, from a year earlier in December, according to the MOEA.

The auto and auto parts industry experienced a limited adverse impact in December with production falling by only 1.05 percent from a year earlier as a shortage of automotive electronics ICs improved, the MOEA said.

Looking ahead, Huang said industrial production in Taiwan could continue to be weak in January due to lower global demand, adding that the reduced number of working days in the month due to the long Lunar New Year holiday, which fell in the month, served as another major factor for reduced production.

According to a MOEA forecast, production in the manufacturing sector is expected to fall by 17.4 percent-20.2 percent from a year earlier to 111.8-115.8 in January.

"The silver lining is that after the ongoing inventory adjustments, the local manufacturing sector is likely to see conditions improve by the end of the second quarter," Huang said.

Source: Focus Taiwan News Channel