Taiwan raises 2026 GDP growth forecast to 11.05% amid AI chip boom

The Taiwanese government has significantly raised its 2026 GDP growth forecast to 11.05%, up from the 9.64% projected in May. If achieved, this would represent the highest growth rate for the nation in approximately 40 years.

This economic surge is primarily driven by the global expansion of demand for artificial intelligence products and advanced semiconductors. Taiwan remains a critical hub in the global supply chain, with companies like TSMC producing high-performance chips for major tech firms including Nvidia and Apple. The government expects exports to increase by 41.07% year-on-year in 2026, the largest increase since 1976.

Corporate earnings are also reflecting this trend. Foxconn (Hon Hai Precision Industry) reported a 35% year-on-year increase in net profit for the second quarter of 2026, with AI server demand accounting for over half of its cloud and network product sales.

Despite the robust outlook, risks remain. Analysts note that a slowdown in AI-related demand could lead to a significant economic correction. Additionally, the 2026 consumer price index (CPI) is projected at 2.07%, slightly above the central bank's 2% target. Growth is expected to moderate to 6.04% in 2027.