Taiwan's machinery exports keep growing on the back of AI and chip demand, which is good for equipment makers but not for traditional machine tool builders losing ground to Japan and South Korea.

• Machinery exports rose 19% in August, the 19th straight monthly gain, and are up 19% so far this year.
• Electronic equipment and testing gear are driving the growth as chipmakers expand and AI server demand stays strong.
• The US is the biggest buyer, taking a quarter of exports, followed by China and Singapore.
• Machine tool exports actually fell, because the Taiwan dollar has held up far better than the yen and won, making Japanese and Korean machines cheaper.
• The Middle East war, swings in energy and raw material prices, and export controls on chips and rare earths could still disrupt supply chains.

Outlook: Full-year exports and output are on track for record highs, but the currency gap and supply chain risks will decide whether the growth holds.