The latest advance estimates surpassed the 12% growth projected by economists, fueled by a 21% jump in exports of goods and services. Heavyweights like Taiwan Semiconductor Manufacturing Co. continue to anchor the output, with gross capital formation accelerating by 26% as domestic firms ramp up capacity to meet international orders. This export success is now bleeding into the local economy, evidenced by a 5.4% rise in private consumption and stronger household spending.
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Taiwan Economy Surges 14% on AI Chip Demand
A 14.36% surge in Taiwan’s GDP during the third quarter has outpaced market expectations, driven by an insatiable global appetite for artificial intelligence hardware. This double-digit growth trajectory highlights the island's unique position as the primary engine for advanced semiconductor manufacturing, though analysts remain wary of long-term sustainability.
Despite the current momentum, the concentration of the island's economic health in the semiconductor sector presents a structural risk. With exports accounting for 85% of GDP, any cooling in global AI infrastructure spending could hit the island disproportionately. Capital Economics projects a sharp deceleration to 1% growth by 2028, citing the potential for a U.S. market correction. For now, the immediate pressure on the central bank is shifting; rising wages and robust corporate lending have fueled market speculation that an interest rate hike could arrive as early as December.
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