TAIPEI (Taiwan News) — Taiwan’s manufacturing index turned from December’s stable green light to a sluggish yellow-blue light in January, Taiwan Institute of Economic Research reported Wednesday.

According to a press release, the manufacturing climate score fell from 13.68 points in December to 10.57 points in January. TIER said the Lunar New Year holiday, early stockpiling of traditional industrial goods, and weak demand led to declining exports and imports, per CNA.

This caused a contraction in export and production index growth, affecting demand and raw material input indicators, it added.

The computer, electronics, and optical products sector benefited from strong AI applications and cloud data demand, per UDN. Orders for servers, semiconductor testing equipment, and components rose. However, a decline in orders for laptops and communication devices affected production, offsetting some of the growth in export and production indices.

In the chemical materials sector, rising crude oil and light oil prices in January drove up prices of most petrochemical raw materials. However, fewer working days, early stockpiling by customers, and winter storms in the US led to declines in exports.

In the basic metals industry, weak domestic real estate market conditions dampened steel demand. The Lunar New Year holiday prompted manufacturers to suspend operations, leading to a decline in production indices for hot-rolled steel coils and rebar.

Looking ahead, the institute warned that US President Donald Trump’s call for reciprocal tariffs on all imports has raised concerns among major trade partners. While measures remain unclear, a tariff hike is expected, potentially reigniting global trade protectionism.