Jiann-Chyuan Wang, Vice President of the Chung-Hua Institution for Economic Research (CIER), indicated that Taiwan’s economic growth rate is expected to reach 5.45% in 2025. This growth is expected to be driven by strong and sustained demand for AI servers, semiconductors, and electronic components, which have had a positive impact on export and investment performance. It demonstrates the core support that technological momentum provides to the overall economy. He noted that amid continued global economic uncertainty, the AI industry supply chain remains a vital engine for maintaining Taiwan’s competitive advantage.
Industry Polarization Deepens Domestic Demand Concerns & Expanding U.S. Trade Surplus Requires Prudent Response
Taiwan’s economy is facing pronounced structural polarization in its industries. While AI-related industries continue to experience rapid expansion, traditional industries and certain service sectors are showing a weak recovery. The employment market continues to face pressure from unpaid leave and reduced working hours, which may undermine the momentum of domestic demand and create a situation where economic highlights coexist with underlying concerns. Vice President Wang urged the establishment of policy measures to support vulnerable industries and prevent the widening of structural gaps.
Regarding international trade risks, Vice President Wang noted that if the United States were to formally impose tariffs on semiconductors in the future, large enterprises with the capacity to establish U.S.-based manufacturing facilities and diversify their operations would have relatively greater resilience. However, small and medium-sized enterprises that lack multinational deployment capabilities and operate on limited profit margins will face greater pressure. Additionally, China’s continued push toward self-sufficiency in mature process technologies may impact Taiwan’s related IC design and component industries.
Taiwan’s expanding trade surplus with the United States increases the risk of being targeted by U.S. trade actions. Both governments and businesses must anticipate challenges, strengthen their foundations, and diversify their market dependencies to enhance economic resilience in a rapidly shifting landscape driven by global supply chain restructuring, heightened technological competition, and evolving trade regulations.
Author: CIER Editorial Team
Date: November 14, 2025