Key Points

The industrial production index rose to 111.48 in June and the manufacturing sub-index to 112.11, both record highs for the month, with the latter, which accounts for over 90 per cent of total output, jumping 20.03 per cent year-on-year, MOEA data showed.

In the first half of 2025, Taiwan's industrial production index rose 16.69 per cent year-on-year to 105.66. The manufacturing sub-index climbed 17.77 per cent from a year earlier to 106.32, the Focus Taiwan report said.

Speaking to reporters, Huang Wei-jie, head of the MOEA's Department of Statistics, stated that Taiwan continues to benefit from strong demand for AI development, despite uncertainties surrounding U.S. tariff policies.

Boosted by AI-related demand, production in the electronic components industry rose 22.38 per cent year-on-year, with its index hitting a record 117.31 for June, the MOEA said. The integrated circuit segment also posted a June high of 129.28, up 22.80 per cent, driven by increased 12-inch wafer output, according to the Focus Taiwan report.

Driven by demand for AI and cloud services, the computer and optoelectronics industry saw production surge 81.95 per cent, with its index reaching 251.56, the MOEA said. The increase was fueled by strong shipments of servers, mobile camera lenses, semiconductor equipment and industrial computers, the MOEA added.

However, Huang said growth in traditional industries remained uneven, with only the machinery sector posting a year-on-year increase in June, up 6.30 per cent, as semiconductor makers continued expanding production capacity.

The base metal, chemical and fertilizer, and auto parts industries all underperformed the broader manufacturing sector in June, with year-on-year declines of 6.15 percent, 1.94 percent and 3.38 percent, respectively, according to the MOEA.

While many manufacturers remained cautious about a possible reciprocal tariff from the United States as talks with Taipei continued, Huang said the sector is expected to receive an additional boost from booming AI demand in the second half of the year.

Huang forecast that the manufacturing sub-index will grow by 19.5 to 23.7 per cent year-on-year in July, reaching between 114.18 and 118.18, the report added.

- ANI