Taiwan's factories are booming on AI demand, good news for its electronics makers — but chip and memory shortages are starting to choke production and push prices up.

• Taiwan's manufacturing index rose again in August, the fastest growth since 2021 and the 11th straight month of expansion.
• All six major industries grew, led by electronics and optics, then electrical and machinery equipment.
• China's factories shrank for a second month, a sharp contrast with Taiwan's run.
• The big bottleneck is memory chips, especially HBM — shortages and rising component costs are lifting prices across all electronics.
• Services also kept growing for an 18th month, though the pace eased as stock market swings dented some consumer confidence.

Outlook: AI-driven demand should keep Taiwan's factories busy, but memory shortages are unlikely to ease soon and will keep pushing electronics prices higher.