Taiwan Q4 economic growth beats forecasts on solid AI demand
A general view of Taipei skyline during sunrise in Taipei, Taiwan, on Sep 29, 2022. (Photo: REUTERS/Ann Wang)
TAIPEI: Taiwan's tech-focused economy grew much more than expected in the fourth quarter, the government statistics agency said on Friday (Jan 30), thanks to strong demand for the chips and related technologies that power artificial intelligence.
For all of 2025, the economy expanded 8.63 per cent, its fastest pace in 15 years. The fourth quarter growth was the fastest quarterly clip in 38 years.
Taiwan plays a pivotal role in the global AI supply chain for companies like Nvidia and Apple. Its position is anchored by the world's largest contract chipmaker, on Taiwan Semiconductor Manufacturing Co.
Gross domestic product grew a preliminary 12.68 per cent in the October-to-December period from a year earlier, the statistics agency said, surpassing the 8.5 per cent growth forecast by analysts in a Reuters poll, as well as 8.2 per cent in the third quarter.
"Demand for applications such as AI and high-performance computing far exceeded expectations," the agency said in a statement.
Taiwan's economy has made big strides, supported by its role as a major producer of advanced semiconductors that power AI and it has largely brushed off the impact of 20 per cent US tariffs, though they excluded chips.
Washington agreed this month to cut that to 15 per cent as part of a broad trade and investment deal.
"Continued strong demand for AI-related products means export demand is likely to remain very strong over the coming year," Capital Economics said in an analyst note.
"Strong economic growth means there is no need for the central bank to provide support, and with inflationary pressures very low, we expect rates to remain unchanged throughout the year."
Quarter-on-quarter, the economy in the October-December period grew at a seasonally adjusted, annualised rate of 23.96 per cent.
The full-year growth of 8.63 per cent was better than the statistics bureau's November forecast of 7.37 per cent and was the fastest since it recorded 12.58 per cent in 2010. In 2024, the economy expanded 5.27 per cent.
The statistics agency will release fourth-quarter revised GDP data on Feb 13, when it will also update its full-year forecast for 2026.
