Last year, Taiwan’s economy grew at the quickest rate in 15 years—8.6% annually—thanks to a boom in shipments to the United States and the hype surrounding artificial intelligence, which boosted its export-oriented businesses.
The estimate provided by Taiwan’s statistics department on Friday was far better than economists had predicted. The growth rate was the highest since 2010.
Earlier this month, Taiwan and the administration of US President Donald Trump reached a trade agreement.
In exchange for commitments to invest at least $250 billion in the United States in sectors like semiconductors and artificial intelligence, it reduced U.S. tariffs on imports from the island from 20% to 15%.
According to experts, this might fuel increased exports and further stimulate the economy this year.
In a recent report, Bank of America economists Xiaoqing Pi and Helen Qiao stated,
“We anticipate AI-related demand to continue underpinning Taiwan’s export performance into 2026, supporting overall economic growth amid sustained global AI investment.”
Taiwan is a significant producer of computer chips, precision tools, and AI servers.
Technology-related goods drove an almost 35% increase in exports over the previous year, U.S. shipments increased by 78%.
Taiwan’s top tech firms have seen unprecedented profits and revenues thanks to the AI surge.
Nvidia is a major client of Taiwan’s TSMC, the largest contract chipmaker in the world and one of the biggest businesses in the world by market value.
Foxconn, a massive electronics company, manufactures AI servers for Nvidia and assembles goods for Apple.
However, because it’s expanding on a strong base, growth is expected to decrease this year, according to economists.
Taiwan’s GDP is predicted by Deutsche Bank to expand by 4.8% in 2026.
Given Taiwan’s reliance on tech exports, there are growing worries that the AI boom might be a bubble and pose a serious risk.
Another concern is the uncertainty surrounding US tariffs under Trump.
Tensions with Beijing also exist.
Taiwan is an independent island that China claims as its own. Concerns about a potential blockade or seizure by Beijing were rekindled in late December when China held extensive military exercises around Taiwan.
