AI Demand Drives Surge in Overtime Hours
Taiwan’s electronics component industry reported its highest-ever overtime levels in July, fueled by the global boom in artificial intelligence applications. According to the Directorate General of Budget, Accounting and Statistics (DGBAS), employees in the sector averaged 27.7 overtime hours—the highest for July since records began in 1980.
The surge underscores how AI, high-performance computing, and next-gen devices are pushing supply chains to their limits. Analysts noted that Taiwan’s key role in chipmaking and electronic components makes it central to the global AI race. This strong momentum reflects how innovation is reshaping labor patterns in the tech-heavy island economy.
Manufacturing Sector Sees 15-Year High in Overtime
Boosted by the electronics boom, Taiwan’s entire manufacturing sector also reported its highest overtime levels in 15 years. Average overtime hours reached 17.1 in July, highlighting how demand spilled over into broader industrial activity. DGBAS deputy director Tan Wen-ling said the data confirms a surge in export orders linked to AI adoption and high-performance hardware.
The wave of foreign orders shows the global reliance on Taiwan’s industrial capacity. At the same time, the uneven distribution of growth revealed a widening gap between high-tech firms and traditional industries.
Taiwan’s Exports Hit All-Time High in July
Exports from Taiwan soared in July, rising 42% year-on-year to a record US$56.68 billion. Electronic components led the charge, contributing US$18.42 billion in outbound sales—an increase of 34.1% from the previous year. Semiconductor suppliers were the primary drivers of this growth, cementing Taiwan’s reputation as the backbone of global chip supply.
The export surge aligns with the product cycles of global tech giants preparing new device launches. Taiwan’s ability to deliver at scale continues to reinforce its dominance in the global semiconductor landscape.
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U.S. Tariffs Accelerate Foreign Orders
Another factor behind the spike in activity was the rush of foreign buyers placing early orders before U.S. tariffs took effect. The new 20% blanket tariffs on Taiwan’s exports were implemented on Aug. 7, pushing companies to secure shipments ahead of time.
This rush added to already elevated demand caused by AI and semiconductor adoption. While beneficial in the short term, the tariff environment could challenge Taiwan’s competitiveness in the months ahead. Businesses remain cautious as they monitor how global trade tensions may reshape export flows.
Uneven Growth Across Industries
Despite the overall boost, the benefits were not evenly shared across Taiwan’s economy. Traditional industries, often referred to as the “old economy,” saw far less growth compared to the tech sector. This divergence suggests that while semiconductors and AI applications thrive, sectors like steel, textiles, and base manufacturing continue to lag.
Policymakers warn that the dual-speed economy could deepen imbalances within Taiwan’s workforce. Bridging this gap may require targeted support to help older industries modernize and remain competitive.
Rising Working Hours Across the Country
The DGBAS reported that Taiwan’s total average working hours in July reached 180.4, up 7.1 hours from June and 5 hours from the previous year. Average overtime across all sectors was 8.5 hours, slightly down from June but marginally higher year-on-year. For the first seven months of 2025, Taiwan’s average working hours stood at 167.3, marking a 0.6-hour increase from 2024.
Overtime also climbed, averaging 8.7 hours—up 0.4 hours compared to last year. These figures highlight the persistent strain on Taiwan’s workforce as global demand keeps factories running at full capacity.
Employment Growth Led by Manufacturing
Taiwan’s employment figures also improved, reaching 8.54 million workers by the end of July—an increase of 40,000 from June. The manufacturing sector led job creation, adding 9,000 workers, the highest of any sector. Retail/wholesale and hospitality/food services followed closely, each adding 8,000 employees.
This shows that while AI-driven tech demand dominates headlines, Taiwan’s domestic economy also benefits from hiring across multiple industries. Strong labor market performance underscores resilience despite the challenges of tariffs and uneven sectoral growth.
