Taiwan manufacturing sentiment rises on AI demand, easing geopolitics

The Taiwan Institute of Economic Research (TIER) reported that Taiwan’s manufacturing composite index rose to 15.75 in May, its highest level since March 2025.

• Main announcement: TIER said the manufacturing composite index increased from 14.03 in April to 15.75 in May 2026, placing the index in the “green” range but close to the “yellow-red” threshold; TIER attributed the rise to AI-driven global demand for electronic components and ICT products, strong DRAM orders, higher retail and base metal prices, and gains in Taiwan’s stock market.
• Background and details: TIER noted the electronic components sector was upgraded from “yellow-red” to “red”, machinery and equipment moved from “green” to “yellow-red”, and cited easing Middle East tensions (reopening of the Strait of Hormuz, improved conditions for Iranian oil exports) that have pushed international oil prices lower, helping ease inflationary pressure from energy imports; TIER also said major cloud service providers and governments increasing AI infrastructure spending are expected to support demand for semiconductors, advanced packaging and testing, and servers.