Taiwan Semiconductor Surge Fuels Record $18.7B Q1 Trade Surplus

Taiwan’s tech sector, led by semiconductors, pushed the island to a record $18.7 billion trade surplus in Q1 2025, a 24% year‑on‑year increase, according to Taiwan’s Ministry of Finance and ING analysis. Semiconductor exports comprised 42% of total exports and integrated circuits reached $48.2 billion (up 28% YoY). TSMC, which holds roughly 55% of the global foundry market and supplies clients such as Apple, NVIDIA and Qualcomm, is the primary driver. Key demand sources include AI infrastructure, 5G rollout, automotive electronics and data‑center expansion. Exports to Southeast Asia saw the fastest growth while China remains the largest destination. Structural advantages cited by ING include industrial clustering (Hsinchu Science Park), strong R&D and supportive policy measures. Taiwan’s manufacturing is near full capacity, employment in the sector exceeds 300,000 directly, and capital expenditure commitments reached $42 billion in 2025. Analysts expect continued growth through 2026 driven by AI, edge computing and advanced node demand, but flag risks from geopolitical tensions, environmental compliance and global competition. For traders, the tech‑led trade strength implies sustained demand for chipmakers and related suppliers, potential currency and equity impacts, and exposure to geopolitical risk premiums.