Taiwan's electronics-machinery sector is heading into the second half of 2026 with cautious optimism, as global demand for AI infrastructure, high-end semiconductors, and cloud services continues to support trade. The latest survey suggests the benefits are spreading through supply chains, with implications for manufacturers and consumers worldwide.
The Taiwan Institute of Economic Research said on June 25 that its business climate survey showed manufacturing sentiment rising for a second straight month, reaching its highest level since June 2024 after model adjustments. The institute said the improvement reflected a global surge in AI infrastructure investment, which has boosted demand for high-end servers and semiconductors.
It also said signs of price pass-through were beginning to appear along electronics supply chains. That helped lift Taiwan's year-on-year export growth rate to 51.7% in May 2026, up from 39.0% in April. Import growth remained strong, supported by the deepening international division of labor in the AI industry and export-driven demand for electronic components and information and communications products.
For the January to May 2026 period, exports rose 48.7% from the same period in 2025, while imports increased 37.8%. The trade surplus reached US$85.21 billion, up 95.2% year on year.
Survey respondents said rising demand for AI, high-performance computing, and cloud services supported shipments and current-month business sentiment across the supply chain. The institute said electronics-machinery firms benefited from AI-driven expansion, which increased demand for advanced-process manufacturing, memory, and high-end packaging and testing.
Foundry capacity utilization remained elevated due to orders tied to advanced processes, optical communications, and low-earth-orbit satellite components. Memory makers saw operations improve as market supply remained tight and prices rose, while packaging-and-testing providers benefited from demand for advanced packaging and AI-chip testing.
Overall, the institute said the outlook for the next six months was tilted toward cautious optimism. Just over 30% of firms were positive about future conditions, while about 60% expected business to remain stable. The survey was based on responses from executives and spokespeople contacted by the institute.
Article edited by Jingyue Hsiao
