Strong AI Demand Drives Taiwan's Q1 Manufacturing Investment Past NT$700 Billion, a 14.5% Yearly Increase

(Central News Agency, Taipei, by reporter Tseng Yun-ting, June 10) The Ministry of Economic Affairs today released its Survey of Manufacturing Investment and Operations for the first quarter of this year. Benefiting from continued strong demand for AI, high-performance computing, and cloud data services, which prompted semiconductor companies to expand production capacity for advanced processes and high-end packaging and testing, the domestic fixed asset acquisitions in the manufacturing sector reached NT$700.1 billion in the first quarter, a 1.3% increase from the previous quarter and a 14.5% increase year-over-year.

The Department of Statistics of the Ministry of Economic Affairs stated that manufacturing operating revenue (including revenue from overseas production) reached NT$9.737 trillion in the first quarter, up 1.0% quarterly and 19.4% annually. This was mainly due to the continued expansion of emerging technology applications and the active establishment of AI infrastructure by various countries, which fueled sustained demand for related hardware and boosted revenue growth momentum in the information and electronics industry. Only some traditional industries saw suppressed operational performance due to intense market competition and conservative customer ordering.

The Ministry pointed out that when observing by fixed asset type, acquisitions of machinery and miscellaneous equipment accounted for the largest share of total acquisitions at 78.9%, an increase of 15.3% year-over-year. This was followed by housing and construction engineering, which accounted for over 20%, an increase of 11.8% year-over-year.

Looking at the investment performance of various industries, the electronic components industry's fixed asset acquisitions reached NT$545.3 billion in the first quarter, accounting for a high of 77.9% of the total manufacturing investment, leading all industries with a 20.1% year-over-year increase. The Ministry indicated this was mainly due to the continuing wave of AI applications, with wafer foundries and packaging/testing companies continuously expanding capacity for advanced processes and advanced packaging.

The computer, electronic products, and optical products industry saw acquisitions of NT$18.7 billion, a 20.2% annual increase, primarily because AI applications boosted demand for cloud information services, leading server contract manufacturers and semiconductor testing equipment companies to expand their factories and production lines. The electrical equipment and appliance industry's acquisitions of NT$107 billion, a 14.9% annual increase, benefited from green energy development, grid resilience enhancement policies, and increased demand for electrical equipment driven by AI data centers.

Furthermore, the petroleum and coal products industry acquired NT$17.1 billion, a 45.1% annual increase, mainly due to the continuous progress of major construction projects by state-owned enterprises and increased investment by operators in response to the energy transition. The metal products industry's acquisitions of NT$125 billion, a 5.3% annual increase, were mainly driven by demand growth from the semiconductor, automotive, and aerospace industries, which prompted operators to build new plants and expand production lines.

However, some industries showed a decline in investment. The chemical materials and fertilizers industry's acquisitions of NT$22.2 billion decreased by 7.1% annually, mainly because the production line expansion projects of some industrial chemical manufacturers were completed one after another, resulting in lower investment compared to the same period in 2025. The basic metals industry's acquisitions of NT$97 billion fell by 38.6% annually; the Ministry stated this was due to a high base of comparison, as major domestic steel manufacturers had made larger expenditures on process upgrades and equipment improvements for energy saving and carbon reduction in the same period of 2025.

The machinery equipment industry's acquisitions of NT$86 billion decreased by 19.8% annually, mainly related to the completion of some production line expansion projects, a high base of comparison, or the successive commissioning of new plants.