Taipei: Taiwan's industrial production saw a significant rise of nearly 12 percent in May compared to the same period last year, marking the 27th consecutive month of year-on-year growth. This surge is attributed to strong demand for artificial intelligence (AI) technologies, as reported by the Ministry of Economic Affairs (MOEA) on Wednesday.

According to Focus Taiwan, data from the MOEA indicated that the industrial production index increased by 11.78 percent year-on-year, reaching a new peak of 136.65 in May. The manufacturing subindex, which constitutes over 90 percent of total production, also achieved a record high of 139.12, reflecting an increase of 12.68 percent. For the first five months of the year, the industrial production index rose by 19.12 percent to 125.91, with the manufacturing subindex climbing 20.57 percent to 128.26.

The MOEA attributed May's industrial production growth largely to the robust global demand for AI applications, high-performance computing devices, and cloud-based services. Chen Yu-fang, the deputy head of the MOEA's Department of Statistics, noted that the local manufacturing sector exceeded expectations as the electronics component industry received a substantial boost from semiconductor production.

In May, the electronics component industry's output increased by 12.17 percent year-on-year, driven by AI development, which bolstered shipments of pure-play foundries' 12-inch wafers, memory chips, IC assembly and testing, and IC design. The computer and optoelectronics industry also benefited from AI, with heightened demand for servers, switches, semiconductor inspection devices, and solid-state drives, leading to a 36.62 percent surge in production compared to the previous year.

Although the industry's growth rate slowed from April's approximately 80 percent due to high comparison base effects from the previous year, the subindex still reached 377.55 in May, indicating sustained high production levels, according to Chen.

Despite these gains, the recovery within the traditional economy sector showed uneven progress last month. The chemical materials and fertilizer industry experienced a 12.92 percent decline in production year-on-year, with some firms reducing output due to decreased demand, as reported by the MOEA.

Conversely, the machinery industry saw its production rise by 10.68 percent from a year earlier, as semiconductor suppliers remained eager to expand capacity. The MOEA also noted an 8.19 percent increase in the base metal industry's production. Chen highlighted that the machinery industry's output grew for the third consecutive month in May, while the base metal industry displayed signs of recovery.

Looking ahead, the MOEA forecasts that the manufacturing sector production subindex will reach between 136.96 and 140.96 in June, representing a 19.9 to 23.4 percent increase from the previous year. For the first half of the year, the subindex is expected to rise by 20.5 to 21.1 percent, reaching between 129.71 and 130.38.