Taiwan’s economy is experiencing rapid growth, with GDP rising by 6.5% in the first quarter of the year, exceeding expectations. One of the main drivers behind this growth has been the increase in exports of AI-related technology such as semiconductors. This surge in artificial intelligence, fueled in part by ChatGPT technology, has played a significant role in expanding Taiwan’s economy.
Taiwan is a global leader in the production of microchips and TSMC produces 90% of the world’s most advanced processor chips. The increasing demand for these semiconductors due to the AI craze has propelled TSMC to become one of the world’s most valuable companies, worth nearly $720 billion.
Exports have also seen a substantial increase, with overall exports rising nearly 19% in March, particularly driven by sales of AI-related hardware which soared by more than 400%. This growth has been attributed to investments in AI-related technologies and the strength of the US economy, providing a boost to Taiwan’s export demand.
In addition to the AI boom, strong consumer spending has also contributed to Taiwan’s growth in the first quarter, with sectors such as tourism, food and beverages, as well as the stock market, experiencing a rebound. However, economists have warned that growth may slow down in the rest of 2023, with estimates suggesting GDP will increase by 3.4% by year-end.
Despite these warnings, there are concerns about uncertainty in the market due to recent reports that suggest companies like TSMC and Intel are predicting a potential slowdown in semiconductor demand in coming months. On Tuesday