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Taiwan electronics output hits record high on AI chip demand
Taiwan’s industrial production reached a record high in 2025, increasing over 16 percent from the previous year, according to the Ministry of Economic Affairs (MOEA).
The overall industrial production index rose to 112.2, with the manufacturing subindex climbing 17.9 percent to 113.1.
The electronics component industry saw a 24.7 percent rise.
In December, the industrial production index increased by 21.6 percent to 131.8, extending a multi-month growth streak.
Demand for semiconductors-related products, was driven by AI applications and semiconductor investments.
However, production declines were noted in base metals, chemical materials, and auto industries.
The MOEA also highlighted a trade agreement with the US that could benefit traditional industries by reducing tariffs.
🔗 Source: Focus Taiwan
🧠 Food for thought
Implications, context, and why it matters.
The AI boom’s durability and breadth require a closer look
- A 16.70% rise in 2025 industrial production should be weighed against forward-looking export orders, which climbed 26.0% in 2025 1.
- The breadth of demand should be tested since information/communications plus electronic products made up over 70% of total export orders in 2025 1.
- Most of the lift was concentrated as these two sectors accounted for 92% of total export-order growth, while base metals plus plastics/rubber were hit by falling orders tied to China oversupply, MOEA’s Huang Wei-jie said 2.
Taiwan’s AI server build-out creates a secondary boom in hardware
- Specialized component makers could benefit from a 56.43% jump in 2025 computer/optoelectronics production.
- AI servers sit behind much of that gain since global AI server shipments are expected to rise more than 28% year on year in 2026, according to TrendForce (a Taiwan-based market research firm) 3.
- AI processors now push past 1,000 watts, which is speeding up a move to liquid cooling, with adoption expected to reach 47% by 2026 and boosting demand for thermal management specialists, TrendForce said 4.
- Heavier rack power loads are also pushing 800-volt high-voltage direct current (HVDC) designs, which creates room for suppliers of silicon carbide (SiC) and gallium nitride (GaN) power parts, TrendForce said 4.
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