- Taiwan's economy is rapidly growing.
- Data released on Tuesday showed GDP rose by a better-than-expected 6.5% in the first quarter.
- Export of AI-related technologies such as semiconductors has become one of the main growth drivers.
ChatGPT's artificial intelligence boom has expanded Taiwan's economy more than expected.
Gross domestic product (GDP) increased by 6.5% in the first three months of this year compared to the same quarter in 2023, the statistics agency said on Tuesday.
That's the fastest expansion rate in nearly three years and faster than the 6% forecast by economists polled by Bloomberg.
The AI boom has been one of the main drivers of Taiwan's growth over the past year.
Overall exports increased by just under 19% in March, and sales of AI-related hardware soared by more than 400%.
“Although the pace of growth may not necessarily show a huge surprise like in March, we believe Taiwan's export demand will continue to receive a meaningful boost from both AI-related investment and continued economic growth. ing” [the] the US economy,” Bansi Madhavani, an economist at Australia’s ANZ Banking Group, previously told Bloomberg.
Taiwan is one of the world's largest manufacturers of microchips needed to power large-scale language models (LLMs) like ChatGPT.
Taiwan's TSMC produces 90% of the world's most advanced processor chips, according to Citi data. The AI boom of the past year and a half has led to a surge in demand for this kind of semiconductors, leading to TSMC taking its place in the world's ninth most valuable company with around $720 billion.
Robust consumer spending also boosted Taiwan's growth in the first three months of the year, with tourism, food and beverages and stock markets all enjoying quarterly recoveries, the statistics bureau said.
Economists have warned that growth could slow for the remainder of 2024, with Taipei expecting its GDP to rise by 3.4% by the end of the year. This is in line with subdued forecasts from TSMC and Intel, which have warned in recent weeks of a potential slowdown in semiconductor demand.
The Taiwan Stock Exchange closed 0.5% lower on Tuesday as traders feared the AI bull market may have peaked, while the new Taiwan dollar traded 0.4 against the US dollar, Refinitiv data showed. % fell.
