Taiwan Output Hits New High, but Government Warns of Slowdown

By Fanny Liu

TAIPEI--Taiwan's industrial output hit a new high in October, though the government warned that holiday-season stockpiling of iPhone and gadget components may have already peaked.

The index that measures output from domestic factories, utilities and mines rose 8.97% on year in October to 112.56, the Ministry of Economic Affairs said Monday. The median forecast of 10 economists polled by The Wall Street Journal was for a 7.7% increase. The index rose 10.16% in September.

Industrial output has grown 5.94% so far this year, as Taiwanese electronics manufacturers are riding high on Apple Inc.'s (AAPL) release of new smartphones and the global rollout of faster fourth-generation mobile networks. Continued recovery in export markets, particularly the U.S., has started to lift the island's production.

Monday's data echoed export orders reported on Thursday, which also hit new high in October. Output data counts only domestic production, while export orders include overseas Taiwanese factories, many of which are Apple's key suppliers such as Hon Hai Precision Industry Co., commonly known as Foxconn.

In October, semiconductor output rose 32.47% from a year earlier to a new monthly high, quickening from a 29.65% increase in September, the ministry said. Taiwan Semiconductor Manufacturing Co.'s (2317.TW)shipments of microprocessors to Apple, which started in late June, have added heft to the island's semiconductor production.

But Taiwan's government warned Monday that semiconductor output had peaked in October and likely will drop this month, as most device makers had already stocked up the components they needed for sales this year. Some economists have projected the boost from new iPhones and other devices would cool toward the end of this year.

Output of personal computer and smartphone components rose 17.69% last month, following a 19.26% increase in September. Recent growth came from robust orders for camera lenses by smartphone makers and amid fresh demand for personal computers after Microsoft Corp. phased out its old operating system earlier this year.

The production of television panels and related components was down 0.94% in September, reversing a 5.07% rise in the previous month.

Write to Fanny Liu at [e-mail]

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