Taiwan's factory sector just hit its strongest reading since 2021, good news for exporters and tech investors, though the signal is barely above the line.

• The Taiwan Institute of Economic Research moved its July manufacturing gauge up to red, the top "boom" level, for the first time since April 2021.
• AI, high-performance computing and cloud demand from the US, Europe and Japan is driving the pickup, offsetting weak demand inside China.
• Export orders and output are both growing faster, and even older industries like plastics and petrochemicals are seeing customers restock.
• The reading only just cleared the red threshold, so it could slip back if factory bosses turn less confident.
• Growth in tech exports to the US has cooled sharply from earlier this year, hinting the boom may be losing steam.

Outlook: The second half will likely grow more slowly than the first, since last year's high base makes big gains harder to repeat.