Taipei: 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.
According to Focus Taiwan, an economic statistics report from the ministry indicated that approved overseas investment totaled US$148.6 billion from 2021-2025, marking a 57.8 percent increase from US$94.1 billion recorded from 2016-2020. This trend reflects Taiwanese companies' efforts to expand their overseas presence amidst global supply chain restructuring prompted by factors such as the COVID-19 pandemic, U.S.-China trade tensions, geopolitical uncertainty, and a rising demand for Taiwan's electronics and ICT products.
The ministry noted a significant shift in Taiwan's outbound investment destinations, moving away from a heavy concentration in China to a more diversified footprint. This change aligns with a global push towards 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 via overseas holding companies.
The United States ranked second, with an average 20.5 percent share, followed by ASEAN members at 20 percent, both primarily driven by manufacturing investment. In contrast, China's share as a destination for Taiwan's outbound investment has steadily declined since 2016, falling to 12.9 percent over the past five years, a significant drop 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 MOEA attributed this 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.
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, driven by the continued overseas expansion of 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.
In ASEAN, Taiwan's investment was led by manufacturing, with the sector's share rising to 56.3 percent over the past five years. The electronic parts and component manufacturing sector contributed significantly, with investment rising by US$9.9 billion, or 8.1-fold, for a 37.5 percent share. This was mainly due to new semiconductor wafer fabrication projects in Singapore and continued supply chain expansion by Taiwanese contract manufacturers.
The ministry also highlighted that investment in plastic products manufacturing grew 3.3-fold, driven 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.