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The demand for AI and high-performance computing has driven Taiwan's exports and corporate investment, with the third quarter economic growth rate reaching 14.36%, the highest in 48 years.

Taiwan’s economy grew 14.36% in the third quarter, the highest growth rate for the same period in 48 years. Strong demand for artificial intelligence (AI), together with better-than-expected exports and business investment, provided the main impetus for the rapid expansion. As global AI infrastructure continues to expand, Taiwan’s semiconductor and electronics supply chains have drawn increased attention from international markets.

According to a report by Central News Agency on Oct. 30, the Directorate-General of Budget, Accounting and Statistics estimated third-quarter economic growth at 14.36%, up 2.94 percentage points from its August forecast. Growth for the first three quarters reached 14.22%, the highest level for the same period in half a century. Taiwan’s economy has now recorded double-digit growth for four consecutive quarters.

The agency said third-quarter merchandise exports and capital formation both outperformed expectations. Benefiting from growing demand for AI, high-performance computing and cloud services, as well as stronger inventory buildup for new consumer electronics products, merchandise exports in US dollar terms rose 44.63% year on year. Real exports of goods and services increased 21.12%.

Business investment also showed strong momentum. To support the development of AI infrastructure and upgrades for related applications, companies stepped up investment in advanced manufacturing processes and production equipment. Imports of capital equipment, measured in New Taiwan dollars, rose 58.5% year on year in the third quarter, while imports of semiconductor equipment increased 35.66%. Real capital formation grew 26.36%, its strongest increase in 20 quarters.

On the domestic demand front, real private consumption grew 5.37% in the third quarter, remaining above 5% for a second consecutive quarter. However, the consumer price index (CPI) rose 2.43% year on year during the quarter, keeping the impact of higher prices on household purchasing power in focus.

The data shows that the AI industry has become a key engine of Taiwan’s economic growth. However, the economy’s heavy reliance on technology exports also means Taiwan must continue to monitor external risks, including the global AI investment cycle, international trade policies and energy supplies. The ability to spread the benefits of technology-sector growth to traditional manufacturing and services will be crucial to maintaining Taiwan’s economic resilience.