Factory closures rose by more than a third in the first half as companies such as Asustek Computer Inc (華碩電腦) shift production to China, where costs are lower.
Closures increased 36 percent from a year earlier to 2,133, the Ministry of Economic Affairs said in a statement in Taipei.
New factory registrations rose 15 percent to 2,245.
"We have been moving into China to help diversify our production," Jade Hung, finance manager at Micro-Star in Taipei, said earlier this week. "There's also a plentiful supply of labor and wages can be as little as a 10th of those in Taiwan."
As Taiwan companies shut local factories and focus their expansion on China, fewer jobs are being created on the country.
The nation's jobless rate last month rose to 5.09 percent from 4.98 percent the month before, the Directorate General of Budget, Accounting and Statistics reported Tuesday. While the number of people out of work rose to 512,000 from 499,000 in May, there was a decline of 3,000 in the number of people who lost jobs due to company closures or cutbacks, the directorate said.
Asustek Computer, Taiwan's largest motherboard maker, may move all its factories to China to cut costs, a Chinese-language newspaper reported Thursday, citing chairman Jonney Shih (