What happened
Taiwan's 2025 economic growth forecast has been elevated to 7.37%, marking its most rapid expansion in 15 years. This acceleration is primarily attributed to robust global demand for artificial intelligence (AI) technologies, which has significantly increased the island's exports and investments. Record export orders, potentially exceeding $700 billion for the year, were driven by AI chip and technology demand, particularly from the United States for chips and servers, with many tech goods exempted from tariffs. The 2026 growth forecast was also revised upwards.
Why it matters
The intensified global reliance on Taiwan for critical AI-related components introduces a significant supply chain dependency constraint for procurement and operational teams. This increased concentration of essential technology sourcing raises due diligence requirements for supply chain resilience planning and risk management, particularly concerning geopolitical stability and potential trade disruptions. It also increases exposure to single-point-of-failure risks within the global technology infrastructure for IT security and platform operators.
