Taiwan’s semiconductor sector is expected to grow 19.1% in output value this year, reaching NT$6.33 trillion (US$209.6 billion), driven by strong performances in integrated circuit (IC) manufacturing and design, according to the Industrial Technology Research Institute (ITRI).

This revised forecast is higher than ITRI’s earlier estimate of 16.2% growth and shows IC manufacturing output rising 23.1% to NT$4.2 trillion (US$139.1 billion), while IC design is projected to increase 13.9% to NT$1.44 trillion (US$47.7 billion).

The IC packaging segment is anticipated to generate NT$461.5 billion (US$15.2 billion), reflecting a 9% increase from last year.

Additionally, the IC testing segment is expected to contribute NT$212.2 billion (US$7 billion), representing a 6% rise.

In the first quarter of 2025, Taiwan’s semiconductor production value was NT$1.48 trillion (US$49 billion), down 0.4% from the previous quarter but up 27.6% year-on-year.

ITRI expects second-quarter output to rise 20.6% year-on-year to NT$1.53 trillion (US$50.7 billion), helped by early customer orders that avoided tariff risks.

🔗 Source: Taipei Times

🧠 Food for thought

1️⃣ Taiwan’s semiconductor dominance faces intensifying global competition

Taiwan’s projected 19.1% semiconductor output growth comes as countries worldwide race to challenge its manufacturing leadership.

Taiwan currently holds a commanding 56% market share in global semiconductor manufacturing through TSMC and other companies 1.

However, this dominance faces growing competition, with South Korea projected to increase its global market share to nearly 20% by 2032, potentially overtaking Taiwan as the world’s second-largest chip producer 2.

The United States is positioning itself as another major competitor, with projections indicating it will triple its semiconductor manufacturing capacity by 2032, capturing 28% of advanced logic manufacturing compared to 0% in 2022 3.

This shifting landscape explains why Taiwan’s semiconductor companies are intensifying their efforts to maintain technological leadership, particularly in advanced processes where Taiwan still maintains a significant edge.

2️⃣ Geopolitical tensions accelerate supply chain diversification

The news of customers rushing orders to avoid Trump’s tariff policies highlights how geopolitical factors increasingly shape the semiconductor industry’s operations.