The ratio of orders fulfilled by Taiwanese manufacturers overseas has consistently declined over the past several years after US President Donald Trump initiated a trade dispute with China during his first term and the release of ChatGPT sparked an artificial intelligence (AI) boom, causing many companies to shift operations back home, the latest export order statistics showed.
Export orders include orders received by local manufacturers’ local headquarters and overseas operations. Last month, 48.2 percent of all orders received by Taiwanese firms were produced in overseas factories, down 0.3 percentage points year-on-year and hitting the lowest level for the same month since 2009, the Ministry of Economic Affairs said in a report on Tuesday.
The ministry attributed the decline mainly to information and communications technology (ICT) companies increasing domestic production of servers.
Photo: Liao Chia-ning, Taipei Times
For the whole of last year, 48.6 percent of all orders received by local firms were produced overseas, the lowest level since 2010, it said.
The ratio has continued to decline from 2016, when it was 54.6 percent, indicating that local companies are relocating production from China and other regions due to tariffs, geopolitical tensions, and other cost and infrastructure considerations.
The ICT industry and the mechanical engineering sector led others by reporting that 81 percent and 70.3 percent of their export orders respectively were fulfilled by their overseas production bases last year, the data showed.
However, the figure for the ICT industry fell for the sixth consecutive year, while the figure for mechanical engineering also declined from a peak of 75.2 percent in 2019, the data showed.
The data also showed a general downward trend for other industries — such as electronic products, base metals, plastic and rubber products, chemicals, optical devices and machinery equipment.
However, close observation is warranted on the impact on firms’ overseas deployments from Trump’s pledge to bring manufacturing back to the US, as the details of his tariff policy remain unclear, the ministry said.
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