2026-02-05
Taiwan Dec Manufacturing PMI Surges to 57.2, Hitting Near Four-Year High, Driven by Twin Engines of AI Demand and Tariff Tailwinds
According to the latest DataTrack data, Taiwan's Manufacturing Purchasing Managers' Index (PMI) for December recorded 57.2, a significant climb of 1.9 percentage points from the previous month (November) at 55.3, maintaining its position above the 50 boom-bust line for four consecutive months. This figure was not only far above the generally expected market level of 51.5 but also set a new record high since April 2022. The data indicates that after a long period of adjustment, Taiwan's manufacturing sector is returning to an expansionary trajectory with strong force, showing that year-end stocking momentum and the strength of industrial recovery have exceeded expectations.
Observing key sub-indices, the strong performance of this PMI was mainly driven by the "New Orders" and "Production" indices. Benefiting from warming end-market demand, the new orders index rose significantly into the expansion zone (market data indicates it reached approximately 58.9), showing a strong willingness among clients to restock inventory. In addition, the supplier delivery time index also rose, reflecting tightness in the supply chain when responding to urgent orders and demand for AI-related components, which is typically an early signal of economic heating.
Regarding this explosive growth in data, the Chung-Hua Institution for Economic Research (CIER) analysis points out that it is mainly attributed to a "twin engine" drive: First, demand for Artificial Intelligence (AI) and High-Performance Computing (HPC) continues to be booming. As a global hub for AI servers and chip packaging and testing (with a market share of over 80%), Taiwan directly benefits from expanded orders by major international manufacturers. Second, the elimination of uncertainty regarding US-Taiwan tariff negotiations—with the US confirming a reduction of tariffs on Taiwan to 15% and granting Most Favored Nation status for semiconductors—has significantly boosted the confidence of export-oriented manufacturers, prompting the accelerated release of orders that were previously on the sidelines.
Looking ahead, in the short term (1-2 months), with the onset of the Lunar New Year stocking wave and the continuous rollout of AI production capacity, manufacturing momentum is expected to remain at high levels in the first quarter of 2026, presenting a heated scenario where the "off-season is not quiet." However, in the medium to long term (3-6 months), attention must still be paid to inflation risks and supply chain bottlenecks. As raw material prices and freight rates rise due to recovering demand, increased input costs may compress manufacturer profits; meanwhile, if variables reappear in global trade policy (such as a new round of measures by the Trump administration), this could also pose a challenge to the current optimistic atmosphere.
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