The AI Boom Is Real, And Taiwan Is Cashing The Checks

Taiwan raised its 2026 economic growth outlook as the island continues to benefit from booming AI-driven exports.

Taiwan’s exports surged about 70% in January, the fastest pace in 16 years, as global demand for AI-related hardware continues to accelerate.

Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) remains central to that strength, serving as the world’s dominant contract chipmaker and a critical supplier of advanced semiconductors. The company plays an outsized role in Taiwan’s economy and holds significant weight in the country’s leading stock index.

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The foundry, a key supplier to Nvidia Corp. (NASDAQ:NVDA) and Apple Inc. (NASDAQ:AAPL), reported a 37% jump in January revenue and plans to boost spending in 2026 as Alphabet Inc. (NASDAQ:GOOGL), Meta Platforms Inc. (NASDAQ:META), Amazon.com Inc. (NASDAQ:AMZN), and others ramp AI investment.

The Directorate General of Budget, Accounting and Statistics now expects GDP to expand by 7.71% this year, sharply above the 3.54% growth pace it projected in November, and said further upward revisions remain possible, Reuters reported Friday.

The agency slightly lowered its fourth-quarter 2025 growth estimate to 12.65% but raised full-year growth to 8.68%, the fastest rate in 15 years.

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Officials said the balance of risks skews toward further upgrades, as major cloud service providers ramp up AI-driven capital spending, reinforcing durable demand for Taiwan’s semiconductor exports.

Taiwan also projected exports surging 22.22% in 2026, far above its prior forecast, while inflation is expected to remain below the central bank’s 2% target.

Taiwan is also reinforcing its role as a global AI and semiconductor center as Nvidia moves ahead with a significant project to build a Taipei headquarters.

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Taipei City Government signed an agreement for the Beitou-Shilin Technology Park site, granting Nvidia a 50-year lease with a potential 20-year extension and 12.2 billion New Taiwanese dollars in royalties.

Nvidia expects to invest more than 40 billion New Taiwanese dollars (about $1.3 billion) and create over 10,000 jobs once the project is operational, alongside plans to use the site as a commercial office and develop a broader business park. This expansion comes as Nvidia deepens ties with Taiwan Semiconductor amid booming AI demand.