Taiwan's traditional manufacturers miss out as chip exports drive growth

Taiwan's economic growth was driven last year by rising AI hardware and semiconductor exports, while traditional manufacturers reported falling exports and pressure from US tariffs and a stronger Taiwan dollar.

Taiwan's economy showed strong growth last year as exports of AI hardware and semiconductors rose sharply. Many smaller, traditional manufacturers reported weaker overseas demand and said US tariffs and a strong Taiwan dollar made exports more costly. Company leaders described reduced sales, shortened hours or unpaid leave for some workers. The contrast between booming ICT exports and struggling traditional sectors has been highlighted in recent reporting. Key facts: - Government estimates reported growth of about 7.4% last year, driven mainly by information and communication technology and semiconductor exports. - Traditional sectors such as machine tools, metals and plastics reported lower exports; one machine toolmaker said its exports fell about 30% and that profit margins were smaller than the remaining tariff level. - US tariffs on Taiwanese goods were announced, adjusted from an initial higher rate to 20% and then reported as cut to 15% under a recent trade deal, while semiconductor firms were largely spared and the deal included commitments by Taiwanese chip and tech companies to invest up to $500 billion in the United States. - Analysts and officials reported that a possible US Supreme Court ruling on the president's authority to impose levies could affect the current arrangement and might require renegotiation if the ruling changes legal grounds. Summary: The reporting shows gains concentrated in the ICT and semiconductor sectors while many traditional manufacturers faced reduced exports, job impacts and currency pressure. The trade deal eased some tariff burdens but observers noted a pending US Supreme Court question that could alter the tariff framework. Undetermined at this time.