Despite fresh uncertainty under Trump's second term, Taiwan's technology and trade sectors are showing surprising resilience and even growth. While his unpredictable tariff policies continue to rattle global markets, Taiwan is capitalizing on an AI-driven boom, with January-April 2025 industrial output and exports hitting new highs.
Statistics compiled by Taiwan's Ministry of Economic Affairs (MOEA) showed that in April 2025, Taiwan's electronic components industry saw a 36.48% year-over-year surge in production, driven by robust demand for high-performance computing (HPC) and AI applications. This uptick boosted the output of 12-inch wafer foundry services, IC packaging, motherboards, testing, and design. For the January-April period, production rose 23.78% compared to the same time in 2024.
The computers, electronics, and optical products sector also posted strong production growth, rising 47.15% year-over-year in April. Demand from cloud services, AI applications, and smartphone lenses lifted production in servers, semiconductor tools, switches, and mobile lenses. Cumulative growth reached 32.29% for the first four months of 2025.
Policy support stokes investment boom
Trump's first term sparked a wave of many Taiwanese companies to return home for investment. In response, the MOEA launched the "Three Major Programs for Investing in Taiwan" in July 2019, offering various incentives, including loan subsidies, assistance with industrial land acquisition, expansion of utility planning, and the implementation of workforce training programs.
These efforts attracted 1,677 companies, pledging over NT$2.53 trillion (approx. US$86.1 billion) in investment. Of these, 335 firms joined the program dedicated to overseas Taiwanese businesses, investing NT$1.37 trillion and creating over 91,000 jobs. With Trump 2.0 underway, Taiwan continues to extend these incentives through 2027.
Trade data defies protectionist fears
Early fears that Taiwan's trade surplus might trigger US retaliation have so far proven unfounded. In April, Taiwan's exports grew 29.94% year-over-year, up from 18.55% in March. Imports rose 32.96%, driven by capital equipment and industrial goods. From January to April, Taiwan's trade surplus reached US$30.83 billion, a 21.5% increase from 2024, according to customs statistics released by the Ministry of Finance.
Taiwan's representative offices in the US and the Executive Yuan's trade negotiators have consistently emphasized to American officials that Taiwan's contract manufacturers and US customers operate in a mutually beneficial and cooperative model. The large trade surplus primarily results from US companies outsourcing production to Taiwanese suppliers, who serve as the unsung heroes behind the global success of American tech giants like Apple, Nvidia, Micron, and Qualcomm.
AI and HPC demand drive economic optimism
At a May 26 press conference, the Taiwan Institute of Economic Research (TIER) noted that Taiwan's economy remained robust in April. A 90-day US suspension of reciprocal tariffs triggered early restocking, boosting ICT and electronic component output.
TIER reported that Taiwan's manufacturers are now more optimistic about the economic outlook for the next six months than they were in April. Persistent demand for AI and HPC, along with resumed US-China tax relief discussions, has improved the six-month sales prospects across tech and traditional industries alike.
Beyond tech, Taiwan's basic metals, plastics, rubber, machinery, and pharmaceuticals are also bouncing back. In particular, pharmaceutical exports to the US more than doubled, helping lift growth rates across the traditional sectors.
Imports are also booming. Strong demand for capital equipment, raw materials, and ICs reflects expanded production plans and downstream demand, particularly in semiconductors and agriculture.
Frontloaded orders boost capacity utilization
Ironically, uncertainty over US tariffs is benefiting Taiwan. In anticipation of possible trade shifts, clients are frontloading orders, pushing up demand. This, combined with AI product launches, is driving higher capacity utilization in advanced chip production, packaging, and testing.
According to TIER's survey, over 30% of companies in the electronics and machinery sectors remain optimistic about the near-term business climate, signaling continued momentum for Taiwan's export-led economy.
Article edited by Jack Wu
