February manufacturing index breaks records in consecutive 25-month stretch

The Ministry of Economic Affairs said today that in February, the industrial production index was 117.49, with an annual increase of 10.01% due to easing supply chain disruptions and chip shortages. This marks the 25-month consecutive positive growth period, also the second-longest in history.

The manufacturing index was 119.76, an annual increase of 10.16%, which set a new high for the same month over the past year, and grew for 25 consecutive months.

From the perspective of major sectors in the manufacturing industry, the electronic component industry is the largest contributor to the growth of manufacturing production. The index in February was 156.71 for this particular segment, an annual increase of 17.14%, which is on the 27th consecutive month of double-digit growth. The circuit industry index was 180.42, an annual increase of 20.10%, a double-digit growth for 28 consecutive months; the LCD panel and component industry index was 131.44, an annual increase of 13.16%, which was a positive growth for 23 consecutive months.

Huang Wei-jie, deputy director of the Statistics Department of the Ministry of Economic Affairs, pointed out that the demand for chips related to emerging technology applications such as high-performance computing, the Internet of Things, and automotive electronics continues to increase significantly.

In addition, the semiconductor industry is expanding its production capacity, which encourages wafer foundries and IC packaging capacity to be fully loaded. As a result, the LCD panel and its component industry have boosted the performance of the electronic component industry as the industry expands into commercial, industrial control, health care, and other industrial fields.

The computer electronic optical products industry index was at 148.95, an annual increase of 9.55%, which was positive growth for 25 consecutive months. Huang analyzed that the demand for cloud data services was booming, and the shortage of materials in the supply chain has been eased, which helped increase the production of servers and wireless communication equipment.

Among the traditional industries, the machinery and equipment industry has benefited from the expansion of production capacity by domestic semiconductor manufacturers, as well as strong orders for 5G-related industries and automation equipment. For instance, the index for this particular area was recorded at 105.19, a 11.44% increase, and marked a consecutive 18-month uptick.

Looking forward to the future, Huang believes that with the increase in vaccine coverage and the successive unblocking of major economies, the strength of terminal demand is expected to increase. In addition, 5G, high-performance computing, Internet of Things, automotive electronics, and other new types of technology applications and enterprises The continuous expansion of digital transformation and the expansion of domestic semiconductor companies can further maintain the production momentum of Taiwan's manufacturing industry.

However, the Russian-Ukrainian war has exacerbated the global inflation pressure, which may restrict trade momentum and economic growth. Huang urged close observation of the rapidly fluctuating situation. Huang said frankly that January and February are the off-season for traditional industries, and there are container congestion factors in the near future to consider. Whether the global economy has another recession on its hands still requires observation.

Huang estimated that the manufacturing production index in March would be somewhere between 143.99 to 147.99, marking another new high or a record high in the same month over recent years, with an annual increase of 3.4% to 6.2%. For context, the index in the first quarter was 134.63 to 135.97, a yearly increase of 7.2% to 8.3%.