Taiwanese firms' overseas investment hits record NT$11.35 trillion amid AI boom; China investment shrinks

Taiwanese listed companies are significantly boosting their overseas investments, reaching a new high of NT$11.35 trillion by the first quarter of this year. This surge is largely fueled by the booming AI sector, prompting companies to expand operations abroad through mergers, establishing new subsidiaries, or increasing capital for existing overseas facilities. The number of Taiwanese companies investing overseas, excluding China, also grew, with 1381 firms participating.

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The increase in overseas investment is due to companies undertaking overseas mergers and acquisitions, establishing new overseas subsidiaries, increasing capital for overseas locations, and participating in capital increases.

In contrast, investment in mainland China is declining. The number of listed and over-the-counter companies investing in China has dropped by 10 from the end of last year to 1214. This shift indicates a broader trend among Taiwanese businesses to diversify their investments globally and reduce their dependence on the Chinese market. This strategic shift has been ongoing since the US-China trade war began in 2018, with companies increasingly repatriating profits from China.

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The number of companies investing in China continues to decrease, while overseas investment numbers continue to increase, reflecting the trend of Taiwanese businesses moving towards globalized and diversified capital allocation.

Despite the decrease in the number of investors, profits from Chinese investments still hit a record high for the first quarter, reaching NT$145 billion. However, the overall strategy appears to be a calculated move to mitigate risks associated with concentrating investments in China. Companies are actively seeking global diversification to spread risk, a trend that the Financial Supervisory Commission (FSC) will continue to monitor.

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Since the US-China trade war in 2018, the increase in investment in China has significantly slowed, while investment income has been steadily repatriated. The increase in overseas investment (excluding China) shows a growing trend, indicating that while investment in China still contributes to the profits of listed companies, they have slowed their pace of investment to reduce reliance on China and diversify risk through global layouts.