TAIWAN-TECHNOLOGY-SEMICONDUCTOR
The Chung-Hua Institution for Economic Research announced that Taiwan's manufacturing PMI is projected to fall to 62.5 in October 2026. While this represents the 13th consecutive month of expansion, shortages of key components and concerns about the profitability of AI investments are slowing industrial growth. (Image suggested: footage of a Taiwanese factory production line or container loading/unloading at Kaohsiung Port.)

Taiwan’s manufacturing sector continued to expand in October, although growth momentum began to ease. The Chung-Hua Institution for Economic Research (CIER) said on Nov. 2 that Taiwan’s manufacturing purchasing managers’ index (PMI) fell to 62.5 in October, down 0.9 percentage points from September. The index remained in expansion territory for the 13th consecutive month, but new orders, production and employment indicators all declined, pointing to fresh supply-chain challenges facing the industry.

According to a Nov. 2 report by the Central News Agency, CIER’s October manufacturing PMI stood at 62.5, while the non-manufacturing index (NMI) came in at 55.4, down 1.5 percentage points from the previous month but still in expansion territory for the 20th consecutive month. PMI and NMI readings above 50 indicate expansion, while readings below 50 indicate contraction.

All five major manufacturing subindexes declined in October. The new orders index fell to 63.2, the production index to 64.7, and the employment index to 56.3. The supplier deliveries index stood at 68.4, while the inventories index dropped to 60.0. The new orders index has declined for two consecutive months, reflecting a slowdown in the pace of order growth.

CIER President Lien Hsien-ming said global artificial intelligence (AI) development has not progressed smoothly across the board. Supplies of some critical components remain tight, particularly memory chips and substrates, which could delay product deliveries. Market attention has also begun to focus on whether massive AI investments can generate corresponding returns.

However, Lien said the decline in the PMI mainly reflected slower growth momentum and did not mean the economy had entered a downturn. The manufacturing outlook index for the next six months rose to 61.7 and remained above 60 for the 10th consecutive month, indicating that businesses retained a degree of confidence in the medium-term outlook.

By industry, all six of Taiwan’s major manufacturing sectors remained in expansion in October. The electrical and machinery equipment sector posted an index of 64.5, while the electronics and optical sector registered 60.0. The figures show that demand from the AI and electronics industries continues to provide important support for Taiwan’s manufacturers. Supplies of key components, inventory levels and delivery schedules will be the main areas to watch going forward.