(C) Focus Taiwan

SEOUL – Taiwan’s economy recorded its strongest performance in 15 years, with the 2025 GDP growth rate hitting 8.6%, according to preliminary data released by government authorities on Friday.

The surge, driven by an insatiable global appetite for Artificial Intelligence (AI) infrastructure, marks the highest growth since 2010, when the island nation saw a 10.25% expansion.

"Surprise" Performance in Q4
The fourth quarter of 2025 was particularly explosive, with a 12.68% year-on-year growth rate. This "surprise" figure far exceeded market expectations, as Bloomberg and Reuters had forecasted growth in the 8.5% to 8.75% range. This momentum allowed Taiwan to breeze past the government’s initial annual target of 7.4%.

The "AI Effect" and Global Trade
Taiwan's dominance in the semiconductor and server supply chains has positioned it as the primary beneficiary of the global AI build-out.

"The explosive demand for AI infrastructure worldwide has translated into robust economic momentum for Taiwan," analysts noted, pointing to the nation's record-breaking export figures last year.
Furthermore, optimism for 2026 is climbing due to a landmark trade agreement signed with the United States on January 15. The deal includes:

Tariff Reductions: Mutual lowering of tariffs to 15%.
Investment: Taiwan pledged $250 billion in investments and credit guarantees for the U.S. market.

Looking Ahead to 2026
In light of these results, major financial institutions are revising their 2026 forecasts upward. Goldman Sachs recently raised its growth projection for Taiwan from 4.4% to 5.1%, citing the continued strength of the tech sector and improved trade relations with the West.

While these preliminary figures are subject to minor adjustments in the coming weeks, the consensus remains clear: Taiwan’s role as the "silicon heart" of the world is fueling an unprecedented economic era.