TAIPEI (Taiwan News) — Taiwan’s manufacturing business climate remained sluggish in December but easing tariff concerns lifted confidence to a 10-month high, the Taiwan Institute of Economic Research said Friday.
TIER said the manufacturing signal stayed at the yellow-blue level, indicating a weak economy, but rose to 12.55 points, its best reading since March last year, per CNA. The improvement was driven by AI and cloud demand and easing impact from US tariffs, per Liberty Times.
The institute explained that strong AI demand helped imports and exports maintain double-digit growth. Optimism from global technology firms also pushed export orders to record highs, while gains in stock prices and trading volume improved business sentiment.
Despite the overall uptick, the institute said industrial polarization persisted. Performance among non-AI manufacturing sectors remained subdued or in recovery, offsetting gains.
The electronic components sector benefited from strong demand tied to AI, high-performance computing, and cloud services. Double-digit growth across trade, orders, and production lifted the sector’s indicator to a booming red signal.
By contrast, the basic metals industry continued to lag as weak global steel demand dragged down exports and output. Although electronics-related materials saw higher demand, the sector’s indicator stayed at the contractionary blue level.
Looking ahead, TIER said the tariff agreement should ease export costs for traditional industries and narrow competitive gaps with Japan and South Korea. However, it warned that future US trade policy, China’s weak domestic demand, and the ability of AI to deliver sustained gains remain key risks.
