Taiwan’s export orders are on track to return to growth this year, driven mainly by the artificial intelligence (AI) boom, snapping two years of declines. Orders are expected to expand up to 4.3 percent annually to about US$539.35 billion this year amid thriving demand for AI chips and AI servers, the Ministry of Economic Affairs said.
However, the focus on the technology sector and a capricious external environment spell trouble for this key economic indicator.
Taiwan is heavily reliant on the technology sector for growth, even though traditional sectors such as basic metals, machinery equipment and chemical products have emerged from a deep slump. About 68 percent of the nation’s export orders in the first 10 months of this year, valued at US$554.5 billion, came from electronic products, chips primarily, and information and communication technology (ICT) devices. In 2014, ICT and electronic products made up about 52 percent of overall export orders, ministry data showed.
Last month, the US accounted for more than 30 percent of ICT product orders and more than 40 percent of electronic products orders, the data showed. That means any trade policy changes that the incoming administration of US president-elect Donald Trump introduces would affect Taiwan.
Manufacturers and exporters are bracing for protectionist trade policies under Trump’s “make America great again” ideals, among which is to boost US manufacturing by imposing tariffs of at least 10 percent on foreign companies, depending on the country.
To address the issue, local manufacturers are adopting an agile stance and are cautiously managing their overseas production sites. Any setbacks in supply chain management might result in losses in new orders, which would have a knock-on effect on Taiwan’s economy.
Hon Hai Precision Industry Co, the world’s biggest electronics manufacturer, last week said that it planned to expand production capacity of AI servers based on Nvidia Corp’s Blackwell chips in Taiwan, the US and Mexico to cope with rising demand. Another Nvidia server supplier, Wistron Corp, also said it did not rule out making servers in the US, “if it is necessary.” Wistron is boosting capacity at its Mexico factory to cope with rapid increases in orders.
For Taiwan’s traditional sectors, it is a different story. Companies are struggling to get out of the woods, given sluggish demand from China, the biggest export destination for local producers of chemical, petrochemical and machinery products.
Moreover, Chinese rivals are nibbling away at Taiwan’s — and everyone else’s — share of the global market by exporting as much as possible at lower prices amid poor domestic demand.
Export orders for rubber, chemical and machinery products made in Taiwan have fallen well behind technology products, the ministry data showed.
Although Beijing has launched economic stimulus packages, it is unclear whether they would revive its economy, so Taiwanese firms are seeking to diversify their markets, including by expanding their presence in the US, Southeast Asia and Europe, the ministry said.
However, it would take time to make significant progress, as local firms do not benefit from lower tariffs as global peers do in the absence of free trade pacts between Taiwan and many other countries.
With technology companies facing rising uncertainty as Trump prepares to re-enter the White House amid a slow recovery in traditional sectors, Taiwan’s economy faces a bumpy road. As most companies in the traditional sectors are small or medium-sized, they need more government aid and resources to deal with the situation. The government also needs to ponder how to rebalance the economy.
From the Iran war and nuclear weapons to tariffs and artificial intelligence, the agenda for this week’s Beijing summit between US President Donald Trump and Chinese President Xi Jinping (習近平) is packed. Xi would almost certainly bring up Taiwan, if only to demonstrate his inflexibility on the matter. However, no one needs to meet with Xi face-to-face to understand his stance. A visit to the National Museum of China in Beijing — in particular, the “Road to Rejuvenation” exhibition, which chronicles the rise and rule of the Chinese Communist Party — might be even more revealing. Xi took the members
A Pale View of Hills, a movie released last year, follows the story of a Japanese woman from Nagasaki who moved to Britain in the 1950s with her British husband and daughter from a previous marriage. The daughter was born at a time when memories of the US atomic bombing of Nagasaki during World War II and anxiety over the effects of nuclear radiation still haunted the community. It is a reflection on the legacy of the local and national trauma of the bombing that ended the period of Japanese militarism. A central theme of the movie is the need, at
The Chinese Nationalist Party (KMT) and the Taiwan People’s Party (TPP) on Friday used their legislative majority to push their version of a special defense budget bill to fund the purchase of US military equipment, with the combined spending capped at NT$780 billion (US$24.78 billion). The bill, which fell short of the Executive Yuan’s NT$1.25 trillion request, was passed by a 59-0 margin with 48 abstentions in the 113-seat legislature. KMT Chairwoman Cheng Li-wun (鄭麗文), who reportedly met with TPP Chairman Huang Kuo-chang (黃國昌) for a private meeting before holding a joint post-vote news conference, was said to have mobilized her
Before the Chinese Communist Party (CCP) and its People’s Liberation Army (PLA) can blockade, invade, and destroy the democracy on Taiwan, the CCP seeks to make the world an accomplice to Taiwan’s subjugation by harassing any government that confers any degree of marginal recognition, or defies the CCP’s “One China Principle” diktat that there is no free nation of Taiwan. For United States President Donald Trump’s upcoming May 14, 2026 visit to China, the CCP’s top wish has nothing to do with Trump’s ongoing dismantling of the CCP’s Axis of Evil. The CCP’s first demand is for Trump to cease US
RSS