TLDRs;
- Taiwan’s trade surplus jumped 46% in August, driven by booming AI and semiconductor exports.
- Exports hit a record US$58.5 billion, exceeding forecasts and marking 22 straight months of growth.
- US overtook China as Taiwan’s top export market, reflecting a major geopolitical realignment.
- Traditional industries like plastics and metals struggle, raising concerns over Taiwan’s tech dependence.
Taiwan’s trade figures for August broke records, reflecting both the country’s growing dominance in advanced technology exports and a widening gap between thriving and struggling industries.
According to Taiwan’s Ministry of Finance, exports surged to US$58.5 billion, a 34.1% increase compared to the same month last year. The figure not only marked the 22nd consecutive month of export growth but also far surpassed analyst forecasts, which had projected totals between US$51 billion and US$53.2 billion.
On the import side, Taiwan recorded US$41.7 billion, up 29.7% year-on-year. That created a trade surplus of US$16.8 billion, representing a sharp 46.3% increase from August 2024. From January through August, the cumulative surplus stood at US$86.9 billion, up 65.6% compared to the same period in 2024.
AI exports reshape Taiwan’s trade structure
The star performers were Taiwan’s information, communications, and video/audio products, which soared 79.9% to US$23.4 billion in August.
This category alone made up nearly 40% of total exports, showcasing how artificial intelligence–related demand is reshaping Taiwan’s export profile.
Electronics also played a crucial role. Exports of components climbed 34.6% to US$20.4 billion, while semiconductor shipments rose 37.4% to US$19.2 billion. Taiwan Semiconductor Manufacturing Company (TSMC) and its peers continue to dominate global chip supply, supplying advanced processors powering everything from AI servers to smartphones.
However, the surge in AI-related goods has created a two-tier export economy. While high-tech shipments thrive, traditional sectors are struggling. Exports of plastics and rubber dropped 12.1%, base metals fell 7.1%, and chemicals declined 4.6% in August. This imbalance suggests Taiwan’s economic growth, projected at 8% in Q2 2025, remains heavily dependent on its technology industries.
US demand eclipses China
Perhaps the most striking shift is geographical. For decades, China and Hong Kong were Taiwan’s dominant export markets. That dynamic is changing quickly. In August, Taiwan’s exports to the US reached a record US$19.6 billion, a year-on-year increase of 65.2%. That accounted for 33.6% of total exports, making the US Taiwan’s largest single trading partner.
By comparison, shipments to China and Hong Kong rose more modestly, 15.9% year-on-year to US$15.2 billion. The long-term trend suggests a strategic realignment. Since 2018, Taiwan’s exports to China have faced periodic declines, while US-bound shipments have accelerated amid escalating US-China trade tensions.
Taiwanese companies have also been reducing their investment exposure to mainland China, diversifying supply chains and building resilience against geopolitical risks.
Balancing growth and risk
Taiwan’s record-breaking export performance has cemented its position at the center of the global AI and semiconductor supply chain. But the success comes with challenges. Analysts warn of potential over-reliance on the chip sector, especially as traditional industries continue to weaken. An appreciating Taiwan dollar, supported by tech-led exports, further complicates the outlook for manufacturers in legacy industries.
For now, however, Taiwan’s trade engine shows no signs of slowing. The combination of strong AI demand, robust semiconductor exports, and shifting trade alliances points to continued momentum in the months ahead. Yet, the growing imbalance between high-tech and traditional sectors will remain a critical issue for policymakers as they seek to balance long-term stability with short-term gains.
