TAIPEI (Taiwan News) — Taiwan’s January manufacturing outlook improved to a green light as AI and high-performance computing demand surged, Taiwan Institute of Economic Research said Wednesday.
TIER reported that the January manufacturing signal rose 1.32 points to 13.81, ending a 10-month streak in the low-growth yellow-blue or blue zones and reflecting a temporary boost from Lunar New Year timing, per CNA.
The gain was driven by strong demand for AI and high-performance computing, coupled with a low January baseline last year, the institute explained, per Liberty Times. Export orders and production indices rose sharply year-on-year, lifting raw material input indicators and manufacturing confidence.
Sector performance showed improvement across the board. The share of blue-light sectors signaling slowdown fell from 46.6% in December to 19.72% in January, while green and yellow-red lights rose to 31.95% and 17.1%. Red lights fell to 11.58%, and combined blue and yellow-blue lights dropped to nearly 40%.
TIER noted that variations in Lunar New Year timing can exaggerate monthly data, recommending that analysts observe trends over January and February combined. Ministry of Finance data indicate that AI-related industries remain strong, while traditional sectors are recovering.
The electronics and optical products sector continued to boom, with servers, networking equipment, and semiconductor testing equipment posting export and production growth exceeding 100% year-on-year.
Machinery also saw gains, driven by investment in advanced semiconductor processes and early stockpiling by manufacturers. Export orders and production indices rose steadily, pushing the sector from low-growth yellow-blue to neutral green.
Despite momentum, TIER cautioned that US and Israeli military actions against Iran at the end of February have heightened geopolitical risks. Rising energy prices and potential supply chain disruptions could affect traditional industries and investment sentiment abroad.
TIER said Taiwan’s semiconductor and ICT supply chains remain supported by AI and cloud data demand but global trade policy shifts and China’s domestic industrial adjustments could influence demand. Stable electricity supply mitigates high-tech industry risks but traditional sectors remain vulnerable to energy price shocks, it added.
