Taiwan Industrial Output Jumps to Record High

By Fanny Liu 

TAIPEI--Output from Taiwan's factories, utilities and mines rose to a record high in May, as demand for semiconductors and other electronic components continued to rise, pointing to an improving global economy.

The industrial output index--which counts only domestic production--rose 5.19% year-over-year in May to 109.56, the Ministry of Economic Affairs said Monday. The median forecast of seven economists polled by The Wall Street Journal was for a 2.26% increase. The index gained 5.29% in April.

Taiwan is one of the world's biggest suppliers of electronic products and components, even though manufacturers from China, South Korea and Southeast Asia are close on its heels. The island's output--mostly electronics--is often used to gauge the health of the global economy.

Semiconductor output rose 11.88%, quickening from 8.09% growth in April. Taiwan Semiconductor Manufacturing Co., the world's biggest contract chip maker by revenue, produces advanced microprocessors exclusively in Taiwan, contributing around 10% to the index.

Personal computer and smartphone production, however, rose only 0.7% last month.

Although global smartphone and tablet sales have already passed the stage of explosive growth, orders placed with TSMC's advanced facilities continue to rise. TSMC, whose latest 20-nanometer facility is supplying Apple Inc. with a chip called A8, has forecast strong demand for smaller and more powerful microprocessors for the rest of this year.

Television panels and related components production, however, dropped 3.90%--worse than a 2.58% decline in April.

Taiwan's screens have been losing market share to South Korean and Chinese rivals, which have invested heavily in advanced and lower-cost technology for years. TV, computer and smartphone makers in China have also increasingly relied on locally produced panels, and have placed fewer orders with Taiwanese manufacturers.