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Taiwan has sharply raised its economic growth forecast for 2025 to 7.37 per cent, the fastest rate in 15 years, as roaring demand for artificial intelligence continues to boost its electronics exports.
Real GDP increased 8.21 per cent in the third quarter compared with the same period last year, driven by a 32 per cent jump in exports mainly due to demand for AI and consumer electronics, the cabinet’s statistics agency said on Friday.
The economy’s expansion in the three months to September 30 was 0.6 percentage points higher than forecast a month ago.
It marks the strongest quarterly growth since the second quarter of 2021, during the pandemic, when soaring purchases of computers by families under lockdown and a global semiconductor shortage boosted Taiwan’s electronics exports.
Under the new full-year forecast, Taiwan’s economy would grow faster than China’s, rare for a developed economy. It would be the highest rate since 2010, when the rebound from the global financial crisis boosted GDP growth to more than 10 per cent.
Taiwan Semiconductor Manufacturing Company, the world’s largest chip manufacturer, produces more than 90 per cent of the most advanced chips consumed globally. Taiwanese companies also dominate manufacturing of an array of other electronics products, including AI servers, laptops, smartphones and their components.
Although global markets have grown increasingly jittery about the risk of an AI bubble, Taiwanese electronics hardware manufacturers, including TSMC and Foxconn, the world’s largest contract electronics manufacturer, say demand for the server infrastructure that underpins AI is growing stronger.
Although the macroeconomic outlook remains uncertain due to the US’s tariff policies, and Taipei expects economic growth to slow significantly next year, the statistics agency still raised its GDP forecast for 2026 to 3.54 per cent, compared with a forecast of 2.81 per cent three months ago.
“[The] long-term momentum in AI technologies and related applications is becoming increasingly entrenched, and several national governments are actively promoting sovereign AI,” it said.
“This expansion is fuelling strong and sustained demand for related hardware, for which Taiwan’s domestic industrial supply chains are highly comprehensive and competitive.”
The electronics boom sharply contrasts with some parts of Taiwan’s domestic economy and traditional industries. “The export momentum of certain traditional products continues to be constrained by global overcapacity,” the statistics agency said.
Real private consumption increased just 1.19 per cent in the third quarter compared with the same period last year.
