Taiwan’s economic outlook has brightened, despite mounting geopolitical risks, as robust demand for artificial intelligence (AI) drives exports and investment, the Taiwan Institute of Economic Research (TIER, 台經院) said yesterday.
The Taipei-based think tank raised its forecast for Taiwan’s GDP growth to 7.56 percent this year, up from the 4.05 percent projected in January, after first-quarter exports and corporate earnings were better than expected.
The upward revision comes even as the IMF and other global institutions have downgraded global growth forecasts amid escalating tensions in the Middle East.
Photo: Lin Chin-hua, Taipei Times
“The upgrade is largely driven by AI-related technologies, which have boosted Taiwan’s export and investment prospects,” TIER president Chang Chien-yi (張建一) told a news conference.
TIER said it expects exports to expand 15.74 percent this year, a significant increase from its previous estimate.
Private investment and consumption are also projected to edge higher, supported in part by stock market gains, it said.
The more upbeat outlook is reinforced by momentum in the semiconductor sector.
Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest contract chipmaker, on Thursday last week raised its revenue forecast for this year and signaled solid order visibility ahead.
The positive guidance points to continued expansion across AI-related supply chains, including servers, memory and other components. That prompted TIER to sharply raise its export projections, particularly for the second half of the year, Chang said.
Taiwan’s growth is also becoming more broad-based. In addition to advanced semiconductors, demand for memory chips and related equipment is increasing, benefiting a wider range of suppliers rather than a single company.
Still, risks remain.
A prolonged conflict in the Middle East could fuel inflation and weigh on global growth, TIER said.
TIER economist Gordon Sun (孫明德) said that a short-lived conflict would have limited impact, but one lasting several months could raise the risk of “stagflation” in the US — a combination of rising prices and slowing growth.
Such a scenario could weaken US consumer spending and prompt major technology firms to scale back investment, slowing the pace of AI development and adoption, Sun said.
Business sentiment was mixed last month, TIER said.
Manufacturers grew more cautious about the next six months, with the business climate index slipping 0.89 points to 95.95, as Middle East tensions weighed on sentiment, it said.
However, most firms expect conditions to remain broadly stable, with concerns centered on geopolitical risks and potential oil price volatility rather than a fundamental demand slowdown, it said.
In contrast, sentiment in the service sector improved, with the index rising to 97.5, supported mainly by gains in the financial and insurance industries, it said.
However, the construction sector remained under pressure.
Its business climate index fell 5.26 points to 91.19, marking a third consecutive monthly decline, as rising energy costs weighed on the industry, TIER said.
Prospective home buyers have largely stayed on the sidelines, anticipating a possible easing of property market curbs, it added.
The Ministry of Transportation and Communications yesterday inaugurated the Danjiang Bridge across the Tamsui River in New Taipei City, saying that the structure would be an architectural icon and traffic artery for Taiwan. Feted as a major engineering achievement, the Danjiang Bridge is 920m long, 211m tall at the top of its pylon, and is the longest single-pylon asymmetric cable-stayed bridge in the world, the government’s Web site for the structure said. It was designed by late Iraqi-British architect Zaha Hadid. The structure, with a maximum deck of 70m, accommodates road and light rail traffic, and affords a 200m navigation channel for boats,
PRECISION STRIKES: The most significant reason to deploy HIMARS to outlying islands is to establish a ‘dead zone’ that the PLA would not dare enter, a source said A High Mobility Artillery Rocket System (HIMARS) would be deployed to Penghu County and Dongyin Island (東引) in Lienchiang County (Matsu) to force the Chinese military to retreat at least 100km from the coastline, a military source said yesterday. Taiwan has been procuring HIMARS and Army Tactical Missile Systems (ATACMS) from the US in batches. Once all batches have been delivered, Taiwan would possess 111 HIMARS units and 504 ATACMS, which have a range of 300km. Considering that “offense is the best defense,” the military plans to forward-deploy the systems to outlying islands such as Penghu and Dongyin so that
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest foundry service provider, yesterday said that global semiconductor revenue is projected to hit US$1.5 trillion in 2030, after the figure exceeds US$1 trillion this year, as artificial intelligence (AI) demand boosts consumption of token and compute power. “We are still at the beginning of the AI revolution, but we already see a significant impact across the whole semiconductor ecosystem,” TSMC deputy cochief operating officer Kevin Zhang (張曉強) said at the company’s annual technology symposium in Hsinchu City. “It is fair to say that in the past decade, smartphones and other mobile devices were
US-CHINA SUMMIT: MOFA welcomed US reassurance of no change in its Taiwan policy; Trump said he did not comment when Xi talked of opposing independence US President Donald Trump yesterday said he has not made a decision on whether to move forward with a major arms package for Taiwan after hearing concerns about it from Chinese President Xi Jinping (習近平). Trump’s comments on Taiwan came as he flew back to Washington after wrapping up critical talks in which both leaders said important progress was made in stabilizing US-China relations even as deep differences persist between the world’s two biggest powers on Iran and Taiwan. “I will make a determination,” Trump said, adding: “I’ll be making decisions. But, you know, I think the last thing we need right
RSS