Taipei: Taiwan's industrial production reached a record high in June, driven by robust global demand for artificial intelligence (AI), which continues to bolster the country's tech sector, according to the Ministry of Economic Affairs (MOEA).

According to Focus Taiwan, data from the MOEA revealed that the industrial production index increased by 22.95 percent year-on-year to 139.44 in June, marking the 28th consecutive month of annual growth. The manufacturing sector, which makes up more than 90 percent of Taiwan's total industrial production, saw a 24.34 percent rise to 142.00 during the same period, maintaining its 28-month growth streak.

In the first half of the year, the industrial production index climbed 19.82 percent compared to the previous year, reaching 128.18. The manufacturing subindex rose by 21.24 percent to 130.55, as reported by the MOEA.

The ministry noted that AI, high-performance computing devices, and cloud-based services have consistently strengthened Taiwan's information and communication technology (ICT) industry. However, some traditional sectors are experiencing challenges due to heightened competition and a sluggish recovery.

Production in the electronics component industry surged by 30.37 percent year-on-year, driven largely by semiconductor firms, which saw a 34.17 percent increase amid the ongoing AI boom. The computer and optoelectronics industry also reported significant growth, with production rising 45.05 percent as AI demand fueled the production of servers, switches, and semiconductor inspection equipment.

Conversely, the chemical and fertilizer industry faced an 11.66 percent decline in production, attributed to market caution among buyers. The auto and auto parts industry experienced a 1.72 percent decrease due to inventory adjustments, the MOEA noted.

Despite these downturns, the machinery industry posted a 17.24 percent year-on-year increase in June, supported by semiconductor suppliers purchasing equipment for expansion.

Chen Yu-fang, deputy head of the MOEA's Department of Statistics, expressed optimism for continued momentum in the latter half of the year, driven by strong AI demand and the launch of new consumer electronics by international brands. Chen also projected that Taiwan's industrial production would grow at a double-digit rate throughout 2026.

The MOEA forecasts a growth rate of 22-25.5 percent year-on-year in the manufacturing sector for July.