TAIPEI (Taiwan News) — Taiwan’s manufacturing sector returned to expansion in October as booming global demand for AI-related hardware pushed the Purchasing Managers’ Index to 50.3%, the Chung-Hua Institution for Economic Research reported Monday.
CIER President Lien Hsien-ming (連賢明) said the rebound was powered by orders for AI-driven equipment and semiconductor components, per CNA. However, he warned that manufacturers remain cautious amid tariff talks with the US and uncertainty over Section 232 measures.
A PMI reading above 50% signals expansion, while a figure below 50% indicates contraction. New orders and production returned to growth last month at 51.1% and 53.2%, driving the overall rebound.
CIER Associate Research Fellow Chen Hsin-hui (陳馨蕙) said demand for power and cooling systems, as well as semiconductor equipment for CoPoS packaging and high-bandwidth memory, fueled the upturn. Easing tariff pressure on the car and textile industries also helped performance.
Chen added that part of the improvement reflected a low base in September, and visibility on future demand remains limited. Petrochemical and metal industries continue to face weak end-market demand, with most firms expecting to reassess conditions in early 2026.
Lien said manufacturing and services are showing early signs of recovery, supported by strong exports and domestic consumption during the October holidays. He cautioned that fourth-quarter momentum will depend on global economic conditions and the outcome of tariff negotiations.
While traditional industries remain under tariff pressure, sectors linked to AI, energy, and machinery have offset some losses, Lien said, adding it is too soon to conclude that tariff effects have fully subsided.
Nov. 4, 2025
Michael Nakhiengchanh
Taiwan News, Staff Writer