Taiwan’s Economy Soars on AI Boom, Semiconductor Demand and Strong Consumer Spending

Taiwan’s economy is currently experiencing a period of remarkable growth, with GDP increasing by 6.5% in the first quarter of the year, surpassing expectations. One of the key driving forces behind this growth has been the increase in exports of AI-related technology such as semiconductors. The boom in artificial intelligence, fueled in part by ChatGPT technology, has played a significant role in expanding Taiwan’s economy.

Exports have 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.

Taiwan is a major player in the manufacturing of microchips, with TSMC producing 90% of the world’s most advanced processor chips. The increasing demand for these semiconductors due to the AI craze has elevated TSMC to become the world’s ninth most valuable company, worth nearly $720 billion.

In addition to the AI boom, strong consumer spending has also contributed to Taiwan’s growth in the first quarter. Sectors such as tourism, food and beverages as well as stock market experienced a rebound. However, economists have warned that growth may slow down in the rest of 2024, with estimates suggesting GDP will increase by 3.4% by year-end.

Despite these warnings, there is uncertainty in the market with companies like TSMC and Intel predicting potential slowdown in semiconductor demand in coming months. On Tuesday, Taiwan Stock Exchange closed lower while New Taiwan dollar fell against US greenback.

Overall, it seems that while there are some concerns about future growth prospects for Taiwan’s economy