Taiwan's economy expanded at an annual rate of 8.6% in 2025, the fastest pace in 15 years, driven by a surge in exports linked to artificial intelligence and increased shipments to the United States, according to an advanced estimate released by Taiwan's statistics agency on Friday. The figure far exceeded economists' forecasts and marked the strongest growth since 2010.
The island's export-focused industries benefited from a global AI boom, with technology-related shipments leading a nearly 35% jump in overall exports year-on-year. Shipments to the US surged 78%. Taiwan is a major manufacturer of AI servers, computer chips and precision instruments, and its leading tech companies, including TSMC and Foxconn, reported record profits and revenues.
Earlier this month, Taiwan finalised a trade deal with the Trump administration, reducing US tariffs on imports from the island to 15% from 20% in exchange for pledges of at least $250 billion in US investment in semiconductors and AI. Economists say this could further boost exports and economic growth this year.
However, growth is expected to slow in 2026 due to a high base effect, with Deutsche Bank forecasting 4.8% expansion. Risks include concerns that the AI boom may be a bubble, uncertainty over US tariffs under President Trump, and ongoing tensions with China, which claims Taiwan as its own territory and conducted large-scale military drills around the island in December.
