Increase in Q2 Fixed Asset Investments in the Manufacturing Sector due to IC Enlargement
Taiwan's Manufacturing Sector Thrives in Q2, Led by Semiconductor Industry
Taiwan's manufacturing sector recorded a significant boost in the second quarter of 2021, with total investments in fixed assets rising by 28.1% year-on-year to NT$620.5 billion (US$20.53 billion). This growth was largely driven by the electronics component industry, which accounted for 72.8% of the total investments.
The electronics component industry saw a 37.3% increase in fixed asset investments in the April-to-June period compared to the same period a year earlier. This surge was primarily due to an increased appetite among semiconductor firms to expand production and upgrade technologies. Notable players in this expansion include TSMC (Taiwan Semiconductor Manufacturing Company) and possibly others, although specific company names were not detailed. SK hynix, based in South Korea, and AMD, though not specifically reported as investing in Taiwan, are also major semiconductor companies with significant activity in 2025.
The growth in the electronics component industry was a key factor in the overall sales growth in the second quarter, which was up 8.9% compared to the previous quarter. The increase in sales was largely due to strong global demand for AI, high performance computing devices, and cloud services.
On the other hand, the non-tech economy was affected by uncertainties in international trade, leading to a decline in sales. The machinery sector, in particular, saw a 1.5% year-on-year decline in fixed asset investment in the second quarter. However, demand for machinery from semiconductor producers helped offset this weakness.
The base metal sector, on the other hand, made NT$15.5 billion in fixed investments during the second quarter, up 25.7% year-on-year. The oil and coal industry also experienced a modest increase, with NT$16.8 billion in fixed asset purchases in the second quarter, up 1.3% year-on-year.
Investments in the computer and optoelectronics industry also surged 64.1% in the second quarter compared to the same quarter a year earlier, due to anticipated rising demand in the AI era.
Overall, the second quarter of 2021 saw a robust performance from Taiwan's manufacturing sector, with the electronics component industry leading the charge. As global demand for AI, high performance computing devices, and cloud services continues to grow, it is expected that this trend will continue in the coming quarters.
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