Market Overview
Taiwan remains a critical hub in the global semiconductor supply chain, accounting for over 60% of global foundry revenue and more than 90% of leading-edge chip manufacturing. In 2024, Taiwan’s semiconductor industry generated over $165 billion in revenue, representing approximately 20.7% of the country’s GDP. Taiwan Semiconductor Manufacturing Company (TSMC) dominates the market, with U.S. firms such as Apple, NVIDIA, and AMD relying heavily on its advanced manufacturing capabilities. The United States maintains strong commercial ties with Taiwan, with U.S. semiconductor design firms being key customers of Taiwan’s foundries.
Taiwan is also positioning itself as a leader in AI chip design. Local companies have increasingly invested in custom AI processors, while foreign design houses are expanding their R&D presence in Taiwan to tap into its engineering talent and foundry ecosystem. Additionally, Taiwan’s alignment with U.S. economic and strategic interests, and its commitment to a secure and resilient semiconductor supply chain, further bolster commercial cooperation.
In terms of trade, Taiwan maintains a strong surplus in semiconductors. The table below illustrates the recent Taiwan semiconductor trade snapshot. HS8542 refers to electronic integrated circuits, including microprocessors, controllers, memory chips, and amplifiers used in electronic devices. HS8486 refers to machines and apparatus used solely or principally for the manufacture of semiconductor devices or electronic integrated circuits, including related parts and accessories. Despite Taiwan’s trade surplus in semiconductors, U.S. companies continue to see strong export opportunities, especially in equipment, supplying over $2.3 billion in the first half of 2025 alone.
For Chip Design for AI, specific HS codes do not exist, as it represents design and IP services rather than physical goods. Based on statistics from Taiwan’s Industrial Technology Research Institute (ITRI), a leading technology R&D institution, Taiwan’s IC design industry generated an estimated $23.1 billion in 2022 and $25.5 billion in 2023, with growth driven largely by demand for high-performance computing. AI chip design led by major players like MediaTek, Realtek, and Novatek is estimated to account for 15 to 20% of the total IC design output, reaching around $3.8 to 5.1 billion in 2023. Continued global investment in generative AI is expected to sustain this upward trend through 2024.
Table: Taiwan Semiconductor Trade Snapshot, Unit: US$ millions
|
| 2022 | 2023 | 2024 | 2025 (as of June 30, 2025) |
Total Exports | IC Manufacturing (HS8542) | 184,136 | 166,621 | 165,042 | 92,514 |
Equipment (HS8486) | 5,069 | 4,760 | 4,948 | 2,386 | |
Total | 189,205 | 171,381 | 169,990 | 94,900 | |
Total Imports | IC Manufacturing (HS8542) | 88,065 | 73,161 | 94,337 | 58,770 |
Equipment (HS8486) | 29,688 | 19,638 | 17,573 | 14,192 | |
Total | 117,753 | 92,799 | 111,910 | 72,962 | |
Imports from the US | IC Manufacturing (HS8542) | 5,220 | 4,678 | 4,522 | 2,868 |
| Equipment (HS8486) | 6,061 | 3,728 | 3,299 | 2,355 |
Trade Surplus/Deficit | IC Manufacturing + Equipment | +71,452 | +79,182 | +58,080 | +21,938 |
Exchange Rates |
| 29.78 | 31.15 | 32.11 | 29.30 |
Source: Taiwan Customs and Ministry of Finance: service.mof.gov.tw
Leading Sub-sectors
Foundry Services: Dominated by TSMC, but opportunities exist for U.S. equipment and materials suppliers to serve not only TSMC but also UMC, Vanguard, and PSMC.
AI Chip Design and IP Licensing: Opportunities exist for collaboration on edge-AI, automotive AI chips, and licensing of AI-related design IP.
Semiconductor Equipment: With continued investment in advanced nodes (3nm and beyond), demand remains high for U.S. precision tools, testing systems, and advanced packaging equipment.
Talent Development and Training Solutions: U.S. firms providing workforce training and certification programs in advanced chip design and fabrication are welcomed by both industry and academia.
Opportunities
AI Innovation Hubs: The Taiwan government’s AI-on-Chip initiative supports partnerships between academia, research institutions, and industry. U.S. SMEs in AI and edge computing can find partners through these platforms.
Advanced Packaging Facilities: TSMC and other players are investing in CoWoS and InFO advanced packaging. U.S. companies can offer supporting tools and materials.
Green Manufacturing Solutions: Environmental standards are rising, creating opportunities for U.S. firms offering cleanroom technology, energy-efficient systems, and water recycling tools.
Technology Collaborations: Many (National Science and Technology Council (NSTC) and Ministry of Economic Affairs (MOEA) programs support bilateral research, presenting opportunities for co-development of AI chips and next-gen semiconductor technologies.
Resources
Trade Shows
SEMICON Taiwan, September 10-12, 2025, Taipei. Taiwan’s leading semiconductor exhibition, drawing global participation across the entire supply chain.
COMPUTEX, June 2-5, 2026, Taipei. Taiwan’s premier global ICT and computing exhibition, showcasing cutting-edge technologies and innovations across AI, IoT, semiconductors, and next-generation hardware.