AI Boom Propels Taiwan's Economy to Fastest Growth in 15 Years
Taiwan's economy grew by 8.6% in 2025, driven by an export surge triggered by AI demand. This rate was recorded as the highest growth pace in the last 15 years.
15-Year Peak: 8.6% Growth
According to preliminary data released by Taiwan's official statistics agency, the island's economy grew by 8.6% year-on-year in 2025. This performance exceeded economists' expectations and marked the strongest growth rate the country has recorded since 2010.
AI Wind in Exports
The primary driving force behind the growth was an export boom fueled by global artificial intelligence investments. Taiwan is a leading manufacturer of AI servers, computer chips, and precision instruments. The country's exports last year increased by approximately 35% compared to the previous year. This surge was decisively driven by a 78% jump in exports to the US, particularly in technology-focused shipments.
Companies Broke Records, Growth Forecasts Revised
The AI boom also propelled Taiwan's leading technology companies to record profits and revenues. Giants like TSMC, the world's largest semiconductor manufacturer, and Foxconn, which assembles Apple products, were among the companies that benefited most from this trend. Bank of America economists predict that AI-related demand will continue to support Taiwan's export performance in 2026 and fuel overall economic growth.
However, economists warn that growth may slow this year due to the high base effect from 2025. Deutsche Bank forecasts that Taiwan's economy will grow by 4.8% in 2026.
Potential Risks and Uncertainties
Despite this positive economic picture, some risks are also notable. Given Taiwan's dependence on technology exports, growing concerns that the AI boom could be a bubble are considered a significant risk factor. Another source of uncertainty is the future of customs tariffs under a potential administration of former US President Donald Trump, despite the existing trade agreement with the US. Tensions between Taiwan and China are also cited among potential pressures on the economic outlook. China views self-governing Taiwan as its own territory and conducted large-scale military exercises around the island last December.
