Taiwan’s economy has experienced a remarkable period of growth in the first quarter of the year, with GDP rising by an impressive 6.5%. This surge in economic activity has been driven by several factors, including the rise in exports of AI-related technology such as semiconductors.
One of the key drivers behind this growth is the increasing demand for artificial intelligence, fueled in part by ChatGPT technology. Taiwan is a major player in the manufacturing of microchips, with TSMC producing 90% of the world’s most advanced processor chips. The growing demand for these semiconductors due to the AI craze has elevated TSMC to become one of the world’s ninth most valuable companies, worth nearly $720 billion.
In addition to the AI boom, strong consumer spending has also contributed to Taiwan’s growth in the first quarter. Sectors such as tourism, food and beverages, as well as the stock market, have experienced a rebound. However, economists have warned that growth may slow down in the rest of 2024, with estimates suggesting GDP will increase by only 3.4% by year-end.
Despite these warnings, there are concerns about uncertainty in the market as companies like TSMC and Intel predict a potential slowdown in semiconductor demand in the coming months. The Taiwan Stock Exchange closed lower on Tuesday as traders expressed their concerns about this potential downturn. Additionally, there was a fallout between Taiwan and China regarding Taiwanese ships carrying weapons being intercepted by Chinese vessels near Japan’s Ryukyu Islands which further added uncertainty to
