Taiwan's overseas investment surges 58% in 5 years

Taipei, July 14 (CNA) Taiwan's approved outbound investment rose nearly 58 percent over the past five years as companies accelerated efforts to diversify production and supply chains beyond China, with the United States and Southeast Asia emerging as the top manufacturing destinations, the Ministry of Economic Affairs (MOEA) said Tuesday.

In an economic statistics report, the ministry said approved overseas investment totaled US$148.6 billion from 2021-2025, up 57.8 percent from US$94.1 billion recorded from 2016-2020.

The increase came as Taiwanese companies expanded their overseas presence amid global supply chain restructuring driven by the COVID-19 pandemic, U.S.-China trade tensions, geopolitical uncertainty and rising demand for Taiwan's electronics and information and communications technology (ICT) products, the MOEA said.

The ministry said Taiwan's outbound investment destinations have shifted markedly in recent years, moving away from a heavy concentration in China toward a more diversified footprint, in line with a global emphasis on supply chain resilience.

Over the past five years, the British Caribbean territories accounted for the largest share of Taiwan's outbound investment at 22.8 percent, mainly through financial and insurance investments made via overseas holding companies.

The United States ranked second with an average 20.5 percent share, followed closely by members of the Association of Southeast Asian Nations (ASEAN) at 20 percent, both driven primarily by manufacturing investment.

In contrast, China -- long Taiwan's top outbound investment destination -- has seen its share decline steadily since 2016, falling to 12.9 percent over the past five years, down from its 2010 peak of 83.8 percent. In the first five months of this year, China's share fell further to just 0.9 percent, the ministry said.

The MOEA attributed the shift to companies localizing production to better serve customers while diversifying manufacturing bases to reduce dependence on any single market.

The electronic components industry was the main driver of investment growth in both the United States and ASEAN, the MOEA said.

In the United States, investment in electronic component manufacturing increased by US$17.6 billion, or 4.9-fold, from the previous five-year period, fueled by continued overseas expansion by major semiconductor companies.

Investment in computer, electronics and optical products manufacturing and pharmaceutical manufacturing both rose by more than 12-fold, increasing by US$1.7 billion and US$1 billion, respectively, as companies expanded production and sales operations in the U.S., the ministry said.

In ASEAN, Taiwan's investment was likewise led by manufacturing, whose share rose to 56.3 percent over the past five years. The electronic parts and component manufacturing sector contributed the most, with investment rising by US$9.9 billion, or 8.1-fold, for a 37.5 percent share.

The MOEA attributed this mainly to new semiconductor wafer fabrication projects in Singapore and continued supply chain expansion by Taiwanese contract manufacturers.

The ministry added that investment in plastic products manufacturing also grew 3.3-fold, buoyed by demand for AI-related plastic components, while investment in transportation and warehousing expanded 3.9-fold, led by shipping companies expanding maritime operations in Singapore.