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Taiwan Economy Grows at Fastest Pace Since 2021 on Chip Boom - BLOOMBERG
(Bloomberg) -- Taiwan’s economy expanded at the fastest pace in almost three years as global demand for artificial intelligence-related technologies fueled a boom in exports.
Gross domestic product grew 6.51% year-on-year to NT$5.46 trillion in the first quarter, according to a statement from the statistics bureau in Taipei on Tuesday, the fastest pace since the second quarter of 2021. That was stronger than the 6% increase economists had forecast in a Bloomberg survey.
“Strong Taiwan GDP mirrors the global tech cycle and exports from the Greater China region. This is in line with the manufacturing PMI figures from China mainland earlier Tuesday,” Raymond Yeung, chief economist for Greater China at Australia & New Zealand Banking Group Ltd, said in a message. “This GDP figure is a reflection of the US economy.”
Taiwan’s economy is one of the main beneficiaries of a surge in global demand for the hardware underpinning AI technologies, such as semiconductors and servers. The better-than-expected growth prompted the statistics bureau to upgrade its full-year GDP forecast Tuesday, raising it to 3.57% from its previous estimate of 3.43% in February.
Taiwan’s exports surged 18.9% in March, the fastest pace in two years, as shipments of computers and related hardware needed for AI rocketed more than 400%.
In addition to exports, consumer spending was also a major contributor to the jump in growth, driven by a rebound in tourism, spending on food and beverages and surging transaction fees for stock-market trading, according to the bureau’s statement.
But the first quarter may be as good as it gets for a while. Economists and government statisticians say growth is likely to slow in the coming quarters, due in part to a higher base of comparison with last year’s figures.
In the past few weeks, chip giants Taiwan Semiconductor Manufacturing Co. and Intel Corp. both offered tepid forecasts for semiconductors and the global smartphone and personal-computing markets.
The more pessimistic outlook triggered an exodus from Taiwanese stocks by foreign investors. Overseas money managers withdrew $4.9 billion from local shares in April as of Monday’s close, Bloomberg-compiled data show. That would be the biggest net outflow since October last year.
(Updated with economist comments in third paragraph, additional details in fourth and sixth paragraphs.)
