Taiwan's Industrial Production Index up 8.63% to 107.93 in June 2014

Taiwan's manufacturing activity has steadily increased in recent months, as the latest report issued by Ministry of Economic Affairs (MOEA) indicates that the industrial production index in June grew 8.63% year-on-year (YoY) to 107.93.

Notable is that the growth hit a 39-month high, partly due to a low baseline a year ago, and partly to booming domestic manufacturing, with manufacturing indexes of semiconductors, PCs, electronics, optoelectronics, machinery and automotive parts all showing double-digit growths.

MOEA officials note that strong consumer demand for mobile Internet devices, recovering global PC sector, steadily growing popularity of cloud computing and the Internet of Things, thriving global car market, recovering willingness among global enterprises to invest in fixed assets worldwide are the main driver to have sustained Taiwan's current boom.

The officials say that the domestic output of  the semiconductor and IC testing and packaging sectors have significantly risen so far this year, with local LED makers having also ramped up capacity to meet market demand.

Under the scenario, Taiwan's manufacturing index hit in June the third-highest of 108.13 on record, also having grown for five consecutive months. For Q2, the industrial production index and manufacturing index both beat a single-quarter high of 107.52 and 107.95, respectively, up 6.43% and 6.71% YoY, thus continuing an uptrend that began in Q3, 2013.

As for the Q3 outlook, MOEA officials forecast that industrial production is very likely to keep rising, primarily due to a traditional high season for electronics and PC sectors, but conceded to several overshadowing factors that may impact  further growth in production activity in Taiwan in the short-term, including increasingly challenging competition among global electronics makers, growth slowdowns in emerging economies, near signing of a Sino-Korea free trade agreement etc. (SC)