TAIWAN-TECHNOLOGY
Taiwan's economic indicator light turned red for the tenth consecutive month in September. The National Development Council pointed out that AI demand and the advantages of the semiconductor industry are important factors supporting the economic situation.

Taiwan's economic monitoring signal remained at the red-light level in September for a record 10th consecutive month, marking the longest such run in history. The National Development Council said robust demand for artificial intelligence and the strength of Taiwan's semiconductor industry have become key pillars supporting Taiwan's economic growth.

According to a Central News Agency report on Oct. 29, the National Development Council's composite score for September was 41 points, up one point from the revised score of 40 for August, keeping the economic signal at red. Of the nine indicators that make up the signal, overtime hours in the industrial and services sectors shifted from green to yellow-red, while the other eight indicators remained unchanged.

Chen Mei-chu, director-general of the council's Department of Economic Development, said the latest run of red lights differs from some previous periods of economic recovery because it has been driven mainly by the semiconductor industry's strengths rather than merely by a low base effect. The council also said both leading and coincident indicators continued to rise, showing that the domestic economy remains on a growth trajectory. It expects the red light could continue through the end of the year.

The rapid expansion of artificial intelligence applications is driving demand for advanced chips, servers and related electronic components. Taiwan is benefiting from its important position in the global semiconductor supply chain. However, economic performance could still be affected by international demand, energy prices, trade policies and changes in global financial markets.

The economic monitoring signal reflects overall economic conditions, but does not mean that all industries and households are benefiting at the same time. Strong technology exports may contrast with the performance of traditional industries and domestic services. Employment, wages, consumption and corporate investment data will therefore also be needed to assess more fully whether economic growth is spreading broadly.

For Taiwan, AI-driven export momentum is an important source of growth. The key going forward will be whether the benefits of growth in the technology sector can extend to more industries, while external risks and balanced economic development are monitored closely.