TAIPEI (Taiwan News) — Taiwan’s semiconductor industry output value grew 5.5% from January to May.

According to a Ministry of Economic Affairs (MOEA) press release on Monday (Aug. 5), consumer and equipment investment momentum slowed, leading to a 7.3% decline in output value in 2023. This ended an 11-year growth streak since 2012, per CNA.

However, in 2024 the rise of AI created a need for high-performance computing and AI applications, accelerating demand for advanced semiconductor manufacturing, the ministry said. This demand drove the output value to return to positive growth, it added.

According to statistics, the semiconductor equipment industry has traditionally been domestically oriented. In 2023, the percentage of direct exports surpassed 50% for the first time.

The government’s support has enhanced the competitiveness of semiconductor production equipment and components, resulting in the direct export proportion rising from 20.3% in 2018 to 50.7% in 2023, the ministry explained.

Additionally, the ministry said the U.S.-China tech war has led to a decline in the export of semiconductor equipment to China and Hong Kong, dropping to 35.7% in June. However, exports to Singapore have increased significantly due to the local government’s support of the semiconductor industry, it said.