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Growing like ‘gangbusters’: Can Taiwan maintain its economic momentum?

From Al Jazeera · () English

Summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Taiwan's economy is experiencing a significant boom, driven largely by the artificial intelligence (AI) sector.
  • The island's stock exchange has become the fifth largest globally, and it is now the third-largest source of US imports.
  • Experts cite Taiwan's advanced chip production as key to its economic success, though concerns remain about geopolitical and demographic challenges.

Taiwan's economy is surging, fueled by the global demand for artificial intelligence technologies. The island has become a major economic success story this year, with its stock exchange climbing to become the fifth largest worldwide by market capitalization, surpassing countries like the United Kingdom, Canada, and India. This impressive growth is largely attributed to Taiwan's significant role in exporting AI and other technology products, particularly to the United States. Last year, US imports from Taiwan nearly doubled from 2024 levels, reaching $201 billion. In May, Taiwan overtook China to become the third-largest supplier of imports to the US, trailing only Mexico and Canada.

Artificial intelligence helps explain the rising importance of Taiwan.

— Chad BownA senior fellow at the Peterson Institute for International Economics, explaining the drivers of Taiwan's economic growth.

Experts describe Taiwan's market acceleration as a return to its "tiger economy" status, crediting its thriving technology sector. "Artificial intelligence helps explain the rising importance of Taiwan," noted Chad Bown, a senior fellow at the Peterson Institute for International Economics. Taiwan produces approximately 90 percent of the advanced chips essential for leading AI models, a critical component that ensures continued global demand. Dexter Tiff Roberts, a nonresident senior fellow at the Atlantic Council’s Global China Hub, expects this trend to be "long term" due to this indispensable role.

It seems to be a win-win for now. But Taiwan is just postponing a reality that’s not sustainable.

— Reza HasmathAn academic faculty adviser at The China Institute at the University of Alberta, commenting on the sustainability of Taiwan's economic boom.

Despite the current economic prosperity, some analysts caution about potential long-term challenges. Factors such as volatile international relations and demographic concerns could complicate Taiwan's future outlook. "It seems to be a win-win for now," said Reza Hasmath, an academic faculty adviser at The China Institute at the University of Alberta, "But Taiwan is just postponing a reality that’s not sustainable." The island's gross domestic product (GDP) saw a remarkable 8.63 percent growth in 2025 and continued its upward trajectory with a 13.69 percent rise in the first quarter of this year. Government data released Friday indicated a further impressive 12.92 percent economic growth in the second quarter, ending in June, demonstrating sustained momentum.

The GDP growth is going like gangbusters.

— Dexter Tiff RobertsA nonresident senior fellow at the Atlantic Council’s Global China Hub, describing Taiwan's economic performance.
DistantNews Editorial

Originally published by Al Jazeera. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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