Taiwan’s Industrial Technology Research Institute (ITRI) has raised its 2025 output growth forecast for the country’s semiconductor industry to 22.2%, citing strong demand for AI-related chips.

The sector’s output is now expected to reach NT$6.5 trillion (US$216.7 billion), up from the previous projection of 19.1% growth.

IC manufacturing will drive the gains, with output set to hit NT$4.36 trillion (US$145.2 billion)  in 2025, up 27.5% year-on-year.

The pure foundry wafer business could reach NT$4.16 trillion (US$138.5 billion), up 28.3%.

Other segments will see modest growth, including IC packaging up 13.5% to NT$480.3 billion (US$16 billion), IC testing up 15.2% to NT$230.5 billion (US$7.7 billion), and IC design up 12.1% to NT$1.42 trillion (US$47.3 billion).

🔗 Source: Focus Taiwan

🧠 Food for thought

1️⃣ Taiwan’s semiconductor growth significantly outpaces global industry trends

Taiwan’s 22.2% output growth forecast far exceeds the global semiconductor industry’s projected compound annual growth rate of 6.25% through 20301.

This strong performance reflects Taiwan’s historical ability to outperform global averages during major technology transitions.

In 2000, Taiwan’s semiconductor industry achieved 57% growth compared to the global industry’s 37% growth rate, showcasing the country’s capacity to leverage shifts in chip demand2.

The current AI-driven boom appears to be creating a similar dynamic, with Taiwan’s expertise in advanced manufacturing positioning it to capture significant value from the global surge in AI chip demand.

The Asia-Pacific region already accounts for over 80% of global semiconductor market revenue, with Taiwan’s foundry leadership through companies like TSMC reinforcing this regional dominance1.

2️⃣ AI demand is accelerating forecast revision cycles across the industry

The rapid upward revisions in growth forecasts highlight how quickly AI applications are reshaping semiconductor demand patterns.

TSMC’s decision to raise its sales growth forecast from 24-26% to 30% within months illustrates the challenge of predicting AI-driven demand, even for industry leaders with advanced planning capabilities.