Taiwan's industrial production dropped by more than 20 percent from a year earlier in January, marking the fifth consecutive monthly year-on-year decline, due mainly to semiconductor supply chain inventory adjustments, the Ministry of Economic Affairs (MOEA) said Thursday.
Data compiled by the MOEA showed the January industrial production index in Taiwan fell 20.5 percent from a year earlier to 109.02.
The latest decline expanded from the 7.93 percent drop in December from a year earlier to 129.62, with the manufacturing sector sub-index, which accounts for more than 90 percent of total production, falling by 21.38 percent to 110.34, also the fifth straight month of year-on-year decline.
The year-on-year declines in the two indexes last month were caused by weakening end-user demand worldwide, a major slowdown in global growth, which led to falling demand and supply chain inventory adjustments, as well as fewer working days during the nine-day Lunar New Year holiday in the month, said Huang Wei-chieh (???), deputy director of the MOEA's Department of Statistics.
Weak performance in the semiconductor sector due to the start of inventory adjustments in the month also contributed to the drops in the indexes, Huang added.
The semiconductor industry saw production fall 12.81 percent from a year earlier in January, snapping a 38-month streak of year-on-year growth since November 2019, according to the MOEA data.
Meanwhile, the production sub-index for electronic component makers dropped 19.7 percent from a year earlier, while the sub-index for computer, electronics component and optoelectronics makers dropped 12.23 percent from a year earlier, ending 35 continuous months of growth since February 2020.
Huang said weakening global demand continues to affect old economy industries so many manufacturers cut production in January, with most reporting a double-digit decline in production.
In the month, production by chemical raw material and base metal industries fell 26.75 percent, 21.72 percent, respectively, from a year earlier, while production in the auto and auto parts industry dropped 23.73 percent year-on-year according to the MOEA data.
Looking ahead, Huang said double-digit declines in industrial production in Taiwan are likely to continue in February due to sluggish global demand.
According to a MOEA forecast, the manufacturing sector sub-index is expected to fall by 7.8 percent-11.2 percent from a year earlier to 105.87-109.87 in February.
Huang said when the local export-oriented manufacturing sector returns to growth depends on when inventories bottom out and global demand revives.
Source: Focus Taiwan News Channel