The Taiwan Institute of Economic Research says the island's manufacturing sector slowed down in February due to the Lunar New Year holiday.
TIER says its manufacturing climate indicator dropped to a "yellow-blue" light, signaling sluggishness.
Economists say this is mostly a short-term change because there were fewer working days during the February holiday, and while demand for Artificial Intelligence remains strong, it was not enough to offset the holiday break.
But the institute is now warning that rising oil and gas prices caused by Middle East tensions could hurt the global supply chain.
Experts say high energy costs could lead to inflation and lower consumer demand, which would limit the positive impact of A-I investment.
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