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Taiwan: Industrial production shrinks again

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Christian Fernsby ▼ | June 24, 2019
Industrial production in Taiwan
Asia   Production of 5G-related computer parts and equipment rose 23.30%

Industrial production in Taiwan fell 3.01% year-on-year in May, continuing the negative trend seen between December 2018 and March 2019, following a brief respite in April where output grew 1.41%.

The end of the smart device product cycle has reduced demand for integrated circuits, which fell 5.83%, and other parts for the production of smart devices, e.g. LED panels, which fell 11.27% YoY in May.

Production of 5G-related computer parts and equipment rose 23.30% YoY but the amount is not large enough to cover the loss of production of 4G devices. Unless 5G equipment becomes the major wireless technology globally, Taiwan's industrial production may have a significant growth problem.

To combat falling production and exports, the government has encouraged manufacturers to move their Mainland China production lines to Taiwan. It is aiming for TWD 500 billion (around 2.7% of nominal GDP in 2018) of investments to be moved from Mainland China to Taiwan, which may increase investment in factory sites and demand for factory workers.

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