Taiwan's electronics industry's triangular trade model collapses, and the proportion of local production in export orders hits a record high

Source: Central Bank Research Report

[Reporter Gao Jiahe/Taipei Report] In the past, the most typical triangular trade model of Taiwan's electronics industry, "Taiwan receives orders, produces in China, and sells in the United States," is rapidly collapsing due to U.S. tariff barriers and information security compliance requirements. A large number of product lines involving high technology, high information security sensitivity, and high-end value-added products are returned to Taiwan for production, while mid- and low-end products are transferred to ASEAN or the United States for local assembly, driving a substantial rebound in Taiwan's domestic exports.

The central bank report pointed out that the production structure of Taiwan's export orders has experienced significant growth and decline. Since 2018, the proportion of export orders produced in Taiwan has surpassed that of China, reaching a record high of 52.9% in 2025, an increase of 5.3 percentage points from 2018.

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In 2025, the proportion of export orders produced in China continued to decline to 26.2%, a significant decrease of 20.7 percentage points compared with 2018. At the same time, the proportion of production in ASEAN and the United States increased to 11.3% (up 9.7 percentage points) and 5% (up 4.1 percentage points) respectively.

The report pointed out that looking at the final sales destination of Taiwanese products produced in China, the proportion of sales to the United States dropped to 14.8% in 2025 (a significant decrease of 12.1 percentage points from 2018), confirming that the traditional "Made in China, exported to the United States" model is accelerating the decline. On the contrary, the proportion of sales to regions other than the United States, China and Taiwan increased to 53.2%, reflecting that some goods have been rerouted to ASEAN and other places for secondary processing and then re-exported to the United States.

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