Taiwan’s economy and capital markets are experiencing a historic expansion, primarily fueled by the global explosion in Artificial Intelligence (AI) and High-Performance Computing (HPC). Driven by a massive surge in exports and corporate earnings, the Taiwan Stock Exchange (TWSE) has reached unprecedented heights, while macroeconomic indicators—including GDP growth and per capita income—are setting multi-decade records.
Macroeconomic Performance: Breaking Historical Records
The demand for Artificial Intelligence (AI) and High-Performance Computing (HPC) has surged, leading Taiwan’s real GDP growth rate in the first quarter of this year to reach 13.69%, marking the highest in nearly 39 years. Both the Chung-Hua Institution for Economic Research and the Taiwan Institute of Economic Research have significantly revised Taiwan’s full-year GDP growth forecast upward to between 7.56% and 7.71%, clearly exceeding the approximately 4% forecast made at the beginning of the year. This reflects the substantial economic boost brought about by AI to the economic structure. The Directorate-General of Budget, Accounting and Statistics also explicitly pointed out that Taiwan’s economic growth rate for this year has been sharply revised upward to 7.71%. The International Monetary Fund (IMF) estimates that Taiwan’s nominal GDP will reach 977 billion US dollars this year, with per capita GDP expected to surpass 40,000 US dollars, firmly placing Taiwan among the leading economies in Asia.
The economic heat in Taiwan is clearly reflected in the leading indicators of the Economic Monitoring Indicator and export data. In March this year, Taiwan’s Economic Monitoring Indicator composite score reached 39 points, continuously showing a “red light,” indicating that the economy is in a high expansion phase. Taiwan’s export value in March reached 80.18 billion USD, setting a new historical monthly record with a year-on-year growth rate of 61.8%. The cumulative exports for the first quarter reached 195.74 billion USD, a 51% year-on-year increase, also breaking historical records. Exports in April remained at a high level, reaching 67.62 billion USD, a 39% year-on-year increase, marking 30 consecutive months of positive growth. Driven by demand for AI, cloud computing, and high-performance chips, orders in the related supply chains remain strong. The Taiwan Credit Information Service optimistically estimates that growth momentum is expected to continue in the coming quarters, with the annual export scale potentially reaching a new high record of 860.6 billion USD.
The global technology industry is entering a new phase of capital expenditure expansion. This year, the five major cloud service providers (CSPs) will spend $800 billion on AI-related capital expenditures, with the figure expected to reach $1 trillion next year. This “AI infrastructure cycle” covers core areas such as data centers, servers, GPUs/accelerator cards, and high-bandwidth memory, with Taiwan positioned as a key hub in the global supply chain.
The “AI Super Surplus” and Strategic Positioning
Goldman Sachs’ latest report introduces the concept of an “AI super surplus,” pointing out that with the rapid expansion of AI chip exports, Taiwan’s current account surplus (the total net amount of a country’s trade, services, and investment income with the outside world) is significantly increasing. It is expected that Taiwan’s current account surplus will exceed 20% of GDP this year, reaching a historic high and significantly outperforming most developed economies. The core driving force behind this phenomenon comes from the global demand for AI infrastructure construction, including large-scale investments in data centers and computing power equipment. Represented by TSMC, Taiwan possesses high technological barriers in advanced process technology and wafer foundry sectors, becoming an indispensable key node in the global AI supply chain. Even facing rising energy import costs, this wave of export expansion is sufficient to offset the related negative impacts. Goldman Sachs further optimistically forecasts that Taiwan’s GDP growth rate this year could approach 10%, continuing the strong growth momentum of 8.7% in 2025, confirming the robust continuity of this technology cycle.
It is worth noting that Goldman Sachs pointed out that this rapid growth is not evenly distributed but shows a clear “K-shaped divergence.” Due to the highly concentrated demand for AI computing power, the main flow goes to a few economies with wafer manufacturing and advanced packaging capabilities, causing the competitiveness gap between regions to continue widening. Taiwan and South Korea, having mastered key technologies in AI chips and memory, have seen their economic momentum significantly accelerate. In contrast, economies in Southeast Asia that rely on traditional manufacturing and general exports face growth pressures. In the coming years, this structural difference is expected to further strengthen, forming a technology growth axis centered on Taiwan and South Korea, which is likely to enhance Taiwan’s advantages.
In terms of fundamentals, Taiwan’s industrial structure has successfully positioned itself at the core of the global AI and high-performance computing value chain. Benefiting from the spillover effects driven by the global AI investment boom, domestic listed companies have demonstrated significant profit growth momentum this year. Annual profits are estimated to increase substantially by 22%, noticeably higher than the 13% projected for 2025. Regarding industrial structure, “information and communication technology and audiovisual electronic products” have become the core engines of Taiwan’s exports and corporate profits. Among them, demand for AI servers, data center equipment, and high-performance computing-related products continues to surge. At the same time, in terms of process technology, the globally leading advanced 3-nanometer and 2-nanometer processes are experiencing strong demand, with related order visibility extending through 2027.
Taiwan’s rapid economic growth is also reflected in the swift increase in per capita income. After Taiwan’s per capita income surpassed $30,000 for the first time in 2021, it reached approximately $38,000 last year, officially surpassing Japan and South Korea for the first time and maintaining this lead for two consecutive years. It is estimated that this year, the per capita GDP will further increase to $44,000, growing by more than 10% compared to last year. According to the latest data from the International Monetary Fund (IMF), Taiwan’s current per capita GDP ranks around the top 25 globally and approximately 4th to 5th in Asia, indicating that it is gradually entering the ranks of high-income economies.
Overall, Taiwan is currently in a structural growth phase driven by the AI technology revolution. In the short term, exports, investment, and economic indicators are all reaching new highs simultaneously, indicating strong economic momentum. In the medium to long term, Taiwan’s key position in the global semiconductor and AI supply chains enables it to continuously benefit from the expansion of technology capital expenditures. Supported by the AI supercycle, Taiwan’s economy is moving toward a new phase of high growth and high value-added development.
Capital Markets and Fund Performance
According to Lipper statistics, as of May 13 this year, the Taiwan stock market has surged 42.8% year-to-date, ranking third among major global stock markets, behind South Korea’s stock market at 86.1% and the U.S. Philadelphia Semiconductor Index at 69.7%. However, mutual funds have outperformed the indices even more impressively. There are 20 domestically registered for sale in Taiwan of Equity Taiwan small- and mid-cap funds, which have achieved an average year-to-date return of 83.7%, topping all fund categories. Among them, 8 funds have posted returns exceeding 90%. The average returns of all Equity Taiwan small- and mid-cap funds over the past three months reached 56.8%, 98.6% over the past six months, and an even higher 211.3% over the past year. As for Equity Taiwan funds, there are as many as 130 funds, with 8 funds achieving returns over 100%. The average year-to-date return of all Equity Taiwan funds is also as high as 66.6%, with average returns of 44.8% over the past three months, 76.8% over the past six months, and an outstanding 160.9% over the past year, marking the best performance in history.
Figure 1: Outperforming Equity Taiwan
Source：LSEG Lipper, as of 2026/5/13, in TWD
Figure 2: Outperforming Equity Taiwan Sm&Mid Cap
Source：LSEG Lipper, as of 2026/5/13, in TWD
