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

What the report says

Taiwan’s economy is expanding rapidly on the back of global demand for artificial intelligence chips and other high-value technology exports, according to Al Jazeera. The outlet said government data released Friday showed the island’s GDP rose 12.92 percent in the second quarter of 2026, after growth of 13.69 percent in the first quarter and 8.63 percent in 2025. Taiwan’s stock market has also surged, briefly becoming one of the world’s largest by market value, as investors have piled into semiconductor-related companies.

Much of the momentum is tied to the United States, which has become a major buyer of Taiwanese goods, especially advanced chips used in AI systems. Al Jazeera reported that Taiwan remains central to global semiconductor supply chains, with some experts saying the island produces about 90 percent of the advanced chips used in leading AI models. The report also noted trade and investment arrangements between Taipei and Washington aimed at securing continued US access to Taiwanese technology.

At the same time, analysts cited by Al Jazeera warned that the boom may be uneven and vulnerable to external pressure. They pointed to Taiwan’s large trade surplus with the US, possible tensions with President Donald Trump’s trade agenda, and ongoing geopolitical friction with China, which claims Taiwan as its own territory. Domestic concerns also include an ageing population, reliance on imported energy, water constraints and the risk that growth remains concentrated in the tech sector rather than spread widely across the economy.