Taiwan's economy surges by around 13% thanks to AI demand
What's the story
Taiwan's economy has witnessed an unexpected growth surge in the second quarter, largely driven by the skyrocketing demand for artificial intelligence (AI) technology. The island's gross domestic product (GDP) grew by 12.9% from April to June, according to data released by Taipei's statistics bureau on Friday. This is slightly lower than the first quarter's growth of 14.6%, but still beats analysts' median forecast of 10.5%.
Trade growth
Strong external demand for AI drives export growth
Taiwan's exports witnessed a massive year-on-year increase of 21.6% in the second quarter, mainly due to the strong external demand for AI and its evolving applications.
The country's imports also grew by 18.3% during the same period.
Despite a slight slowdown from Q1, Gareth Leather, senior Asia economist at Capital Economics, said, "It is still very strong growth by any standard."
Tech influence
Investment growth to remain strong
Taiwan is a global leader in manufacturing semiconductors for AI systems. The island is home to hardware production giants such as TSMC and Foxconn, which are instrumental in this growth.
Leather noted the ambitious investment plans of Taiwan's major semiconductor companies and predicted that investment growth should remain strong.
He also maintained his forecast that the economy will grow by an above-consensus 14% this year.