Taipei: The domestic production share of export orders for Taiwanese companies reached a record 52.9 percent in 2025, according to the Ministry of Economic Affairs (MOEA). This milestone comes as the combined production share in China and Hong Kong fell below 30 percent for the first time.

According to Focus Taiwan, the decline in production in China and Hong Kong is largely due to U.S.-China trade tensions. These tensions have led Taiwanese businesses to either bring production back to Taiwan or expand their manufacturing operations beyond mainland China. The MOEA's annual survey on the overseas production of export orders highlighted that the domestic production ratio increased by 1.6 percentage points from 2024. This growth was driven by rising demand for AI and cloud computing, particularly in IC manufacturing and server orders, which are predominantly produced in Taiwan.

Meanwhile, the portion of production in China and Hong Kong decreased by 6.9 percentage points to 26.2 percent. Conversely, ASEAN countries saw their share rise by 2.1 percentage points to a record 11.3 percent, with Vietnam leading at 4.5 percent. Self-production, including output by subsidiaries and affiliated companies, was the dominant category, accounting for 78.4 percent of export orders, although this share declined by 4.2 percentage points from the previous year.

Outsourced production increased to 11.5 percent due to greater reliance on contract manufacturers by smartphone and laptop makers. Purchases from other manufacturers also rose to 10.1 percent, fueled by higher order volumes at semiconductor distributors. Of the 2,779 companies surveyed, 802, or 28.9 percent, engaged in overseas production, citing customer requirements, lower costs, and easier access to local materials as the main reasons.

Goods produced overseas were primarily resold to third countries (71.5 percent), with local sales accounting for 22.1 percent and shipments back to Taiwan making up 6.5 percent. The share of goods made in China and Hong Kong that were exported to the United States dropped by 4.7 percentage points to 14.8 percent, as production for U.S.-bound orders shifted to Taiwan and other locations.

ASEAN, with Vietnam at the forefront, remained the top destination for new and expanded production lines. Notably, two-thirds of relocated production lines moved out of China and Hong Kong, according to the MOEA.