Taiwan’s economy inches upwards but misses target as AI tech demand fails to materialise

Taiwan's economy experienced a modest growth of 2. 32 per cent in the third quarter, falling short of the government's forecast. This reflects a lukewarm interest in Taiwan's high-tech products, despite the increasing global traction of artificial intelligence (AI). This quarter's growth brought Taiwan's gross domestic product (GDP) to US$191. 6 billion, preventing a slump for a second consecutive quarter, but missed the official target of 2. 54 per cent.

Globally, the AI market is projected to grow by 17. 3 per cent from this year through 2030, driven by demand for chatbots, blockchain, and healthcare automation applications, according to market research firm Statista. Taiwan currently supplies about 60 per cent of the world's semiconductor chips. Industry leaders and economists anticipate more orders for graphic processing units, memory chips, storage hardware and other components that facilitate AI transactions.

However, the third quarter's figures indicate only an early stage of this potential growth cycle. Tony Phoo, an economist with Standard Chartered Bank in Taipei, noted that the tech sector is generally reducing inventory. He added that they are monitoring data that would suggest a stabilisation in the global demand for consumer electronics. Taiwan's exports have declined over the past year due to a decrease in global purchases of PCs and smartphones, as the pandemic-induced boom in telework and home study has subsided. Tech firms, which constitute just under one-third of the economy, saw their inventory increase during that period of heightened demand.