Taiwan's National Development Council (NDC) announced on February 27 that the composite index of economic indicators for January 2025 dropped by four points to 34, signaling a shift to a yellow-red light, indicating an economic slowdown.
Government officials noted that export data for January suggests manufacturers are adjusting to the return of Donald Trump to the US presidency. While the first quarter is traditionally a slow season, strong AI-driven demand has kept exports steady, allowing Taiwan's economy to maintain moderate growth.
An official from the NDC's Economic Development Department acknowledged that while "Trump 2.0" has introduced uncertainties in global trade, major international institutions still forecast continued growth in global trade for 2025. Additionally, increased capital expenditures by global tech giants, along with the ongoing expansion of AI and high-performance computing (HPC) applications, are expected to sustain Taiwan's export momentum.
Taiwan's semiconductor manufacturers are aggressively expanding advanced manufacturing and high-end packaging capacity, while international firms are setting up R&D centers and data hubs in Taiwan. Meanwhile, businesses are accelerating investments in digital transformation and net-zero initiatives. These factors continue to boost investment, though risks such as shifting trade policies and geopolitical tensions remain key concerns.
According to the latest NDC economic indicators, among the nine key components, customs export value has shifted from yellow-red to red, indicating stronger growth. The industrial production index recorded a 12.0% increase, maintaining a red-light status. Meanwhile, overtime work hours in the industrial and service sectors rose from 13.3% to 15.6%, also sustaining a red-light signal.
Customs export value growth surged from 13.8% in the previous month to 28.1%, shifting from a yellow-red to a red-light indicator. Imports of machinery and electrical equipment saw a decline from a revised 49.3% increase to 34.7%, but still maintained a red-light status. These figures underscore the continued strong economic activity driven by Taiwan's AI server and semiconductor industries.
Article edited by Jerry Chen
