Taiwan's economy grows 8.6% in 2025, fastest rate in 15 years, turbocharged by AI boom

Taiwan's economy grows 8.6% in 2025, fastest rate in 15 years, turbocharged by the AI boom

TAIPEI, Taiwan -- Taiwan's economy expanded at an 8.6 per cent annual rate last year, the fastest pace in 15 years, as its export-focused industries were buoyed by the frenzy over artificial intelligence and a surge of shipments to the U.S. The advanced estimate released by Taiwan's statistics agency on Friday was much better than economists had forecast. It was the strongest growth rate since 2010. Taiwan set a trade deal earlier this month with U.S. President Donald Trump's administration. It lowered U.S. tariffs on imports from the island to 15 per cent from 20 per cent in exchange for pledges of at least US$250 billion of investment in the U.S. in areas such as semiconductors and AI. That could power higher exports, further charging the economy this year, economists say. "We expect AI-related demand to continue underpinning Taiwan's export performance into 2026, supporting overall economic growth amid sustained global AI investment," Bank of America economists Xiaoqing Pi and Helen Qiao wrote in a recent note. Taiwan is a major manufacturer of AI servers, computer chips and precision instruments. Its exports jumped nearly 35 per cent last year from a year earlier, led by technology-related shipments. Shipments to the U.S. surged 78 per cent. The AI boom has also propelled Taiwan's leading technology companies to record profits and revenues. Taiwan's TSMC, the world's biggest contract chipmaker, counts Nvidia as its key client and is one of the largest companies in the world by market value -- and electronics giant Foxconn, which makes AI servers for Nvidia and assembles products for Apple. However, growth this year will likely slow since it's building on a high base, economists say. Deutsche Bank estimates Taiwan's economy will grow 4.8 per cent in 2026. Growing concerns that the AI boom may be a bubble are a key risk given Taiwan's dependence on tech exports. Uncertainty over U.S. tariffs under Trump are another worry. So are tensions with Beijing. China claims Taiwan, a self-ruled island, as its own territory. China conducted large-scale military drills around Taiwan in late December, renewing concerns over a possible blockade or seizure by Beijing.

Taiwan Q4 economic growth beats forecasts on solid AI demand

TAIPEI, Jan 30 (Reuters) - Taiwan's tech-focused economy grew much more than expected in the fourth quarter, the government statistics agency said on Friday, thanks to strong demand for the chips and related technologies that power artificial intelligence. For all of 2025, the economy expanded 8.63%, its fastest pace since 2010, when it grew 10.25%. Taiwan plays a pivotal role in the global AI supply chain for companies like Nvidia and Apple. Its position is anchored by the world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Co,. Gross domestic product grew a preliminary 12.68% in the October-to-December period from a year earlier, the statistics agency said, surpassing the 8.5% growth forecast by analysts in a Reuters poll, as well as 8.2% in the third quarter. "Demand for applications such as AI and high-performance computing far exceeded expectations," the agency said in a statement. Taiwan's economy has made big strides, supported by its role as a major producer of advanced semiconductors that power AI and it has largely brushed off the impact of 20% U.S. tariffs, though they excluded chips. Washington agreed this month to cut that to 15% as part of a broad trade and investment deal. (Reporting by Faith Hung and Emily Chan; Editing by Jacqueline Wong and Thomas Derpinghaus)