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

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.

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.

In addition to the AI boom, strong consumer spending has also contributed to Taiwan’s growth in the first quarter, with sectors such as tourism, food and beverages, as well as the stock market, experiencing 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 are concerns that growth may slow down even further due to potential slowdowns in semiconductor demand from companies like TSMC and Intel predicting potential slowdowns in demand for their products over the coming months.