Taiwan's economy expanded at a stunning 13.69 percent year-on-year in the first quarter of 2026, the island's statistics agency announced Thursday, marking the most robust growth in nearly four decades and underscoring its semiconductor industry's dominance amid intensifying US-China technology competition.
The result far exceeded the 11.46 percent forecast by the Directorate-General of Budget, Accounting and Statistics (DGBAS), driven by an extraordinary surge in exports that officials say reflects Taiwan's entrenched position at the center of global chip supply chains.
"The result was powered by exports, which remain the backbone of Taiwan's economy," Chiang Hsin-yi, a DGBAS official, told reporters in Taipei.
Outbound shipments jumped 51.12 percent to $195.7 billion, with electronic components and information and communications technology (ICT) products representing 78.5 percent of total exports. Goods and services exports soared 35.25 percent, according to the Taipei Times.
The numbers arrive as Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest contract chipmaker, announced that its 2-nanometer chip capacity would "grow at a compound annual rate of 70 percent from this year to 2028," with five fabrication plants beginning volume production in 2026.
That expansion reflects surging global demand for advanced semiconductors used in artificial intelligence systems, data centers, and smartphones—sectors where Taiwan commands more than 60 percent of global foundry capacity and over 90 percent of the most advanced nodes.
Domestic economic activity also strengthened. Private consumption grew 4.89 percent while capital formation increased 5.2 percent. Imports rose to $142.8 billion, with capital equipment purchases surging 33.52 percent as manufacturers invested in new production capacity.
"Strong exports are feeding through to investment and manufacturing, creating a positive feedback loop," the DGBAS analysis noted.
