Taiwan is preparing to lift its 2025 economic growth outlook after a strong third quarter underscored the pull of artificial intelligence across the island’s tech supply chain. The statistics agency signaled that an official forecast above 5 percent is on the table as investment in cloud infrastructure and AI hardware accelerates.
Output expanded 7.64 percent year over year in the third quarter, easing from 8.01 percent in the second quarter but beating earlier expectations. Updated projections and a detailed breakdown are scheduled for release on November 28, with officials expected to reflect stronger exports, capital spending and inventory rebuilding tied to AI-related demand.
Q3 GDP and TSMC gains offset 20% tariffs
The faster pace in July to September was fueled by equipment investment and robust shipments of information and communications technology. Gains in high value segments helped offset softer results in traditional manufacturing and consumer services, keeping full-year momentum intact.
With two consecutive quarters above 7 percent, forecasters have room to lift 2025 assumptions. Private research groups have already moved higher, and the central bank’s own projection for 2025 stands in the mid-4 percent range, leaving space for an upward revision if external demand holds.
Since August 7, the United States imposed a 20 percent tariff on most Taiwanese goods; semiconductors are exempt pending a Section 232 review, easing near-term risk but pressuring downstream electronics, machinery and consumer products.
Chipmakers still benefit from strong AI demand, with the largest foundry reporting record profit in July 2025 and raising full-year guidance. Tariff uncertainty persists for non-exempt components and finished goods shipped to the U.S.
Central bank 2% rate guides 2025
The central bank kept its policy rate at 2 percent in September and signaled a preference for stability amid solid growth and contained inflation. A steady rate path supports capital expenditure in fabs, data centers and power infrastructure, while moderating currency swings that could disrupt export pricing.
If the November 28 data confirm resilience, authorities are positioned to lift the 2025 growth forecast above 5 percent while watching tariff developments and the semiconductor review. Key swing factors include the timing of new AI server ramps, electricity supply for new fabs, and the outcome of talks seeking broader tariff relief. The balance of evidence points to continued outperformance in AI-linked sectors even as non-tech exporters face higher costs in the U.S. market.
