Taiwan’s economy is experiencing a significant surge, with its GDP growing by 6.5% in the first quarter, surpassing expectations. The growth has been largely driven by exports of AI-related technologies like semiconductors. Taiwan, a major manufacturer of microchips needed for large language models like ChatGPT, has seen a surge in demand for its semiconductor products. TSMC, one of Taiwan’s leading chip producers, has become one of the world’s most valuable companies, with its market value almost reaching $720 billion.
The pace of growth has exceeded economist predictions, with exports increasing by nearly 19% in March, driven by a 400% surge in sales of AI-related hardware. The artificial intelligence boom, fueled by technologies like ChatGPT, has played a crucial role in expanding Taiwan’s economy. In addition to the AI craze, strong consumer spending has further supported Taiwan’s economic growth in the first quarter of the year. Sectors like tourism, food and beverages, and the stock market have all experienced a rebound, contributing to the overall positive performance of the economy.
Despite the promising growth, economists caution that the pace may slow down throughout the rest of 2024, with projections indicating a 3.4% increase in GDP by year-end. Recent warnings from major semiconductor companies like TSMC and Intel about potential slowdowns in demand have impacted market sentiment, with the Taiwan Stock Exchange closing lower on Tuesday. Traders are concerned that the AI rally may have peaked, leading to a decline in value for the New Taiwan dollar against the US dollar. However, despite these challenges
