Taiwan's manufacturing purchasing managers index rose to 60.3% in April 2026, marking the seventh consecutive month of expansion and the strongest pace since September 2021, the Chung-Hua Institution for Economic Research and the Taiwan Management Institute Taiwan said on May 4. Executives attributed the rise to shifting capacity and price pressures from AI, semiconductors and electronic components, plus pre-buying by manufacturers amid supply tightness and geopolitical tensions in the Middle East.
According to the Chung-Hua Institution for Economic Research, a disruption in plastics supply in March 2026 and a subsequent halt in pricing prompted manufacturers to accelerate orders, reinforcing earlier AI-driven demand that began building in November 2025. That combination produced shortages and higher prices across semiconductor supply chains and electronic components, the association disclosed.
Market reports in April that a major international memory maker was preparing to strike coincided with a jump in the supplier delivery time index for manufacturing, which rose 4.3 percentage points to 70.6%, the fastest increase since July 2021 and well above the 50.0% expansion threshold. The institution also said the outbreak of US-Iran conflict briefly pushed the seasonally unadjusted production index for the chemicals and biotech and medical sectors into contraction, triggering severe shortages and supply-chain disruptions.
After early scrambling for spot-market supplies and pull-in orders, the unadjusted production index for chemicals and biotech and medical recovered from two months of contraction to expansion, increasing 8.5 percentage points to 57.3%, according to the Chung-Hua Institution for Economic Research. The institution added that international oil-price increases raised costs for fuel, electricity, sea freight and land transport, though high-end machine tools were not affected by oil-price swings.
Demand tied to global semiconductor capacity builds, AI server and data center expansion sustained strong orders for high-value equipment, while drone and power grid construction supported automated heavy electrical machinery. The institution said high-value-added electronics, optoelectronics and power and machinery equipment firms showed clearer order visibility and better outlooks, continued to select customers carefully and passed through costs, helping the manufacturing future six months outlook index expand for a fifth consecutive month. By contrast, some traditional industries continued to face rising costs and supply shortages and worried that subsequent inflation could dampen end-market demand.
Article edited by Jingyue Hsiao
