Taiwan economy grows 12.9% on AI demand

Taiwan's economy grew 12.9 percent from April to June, government data showed Friday, as demand for artificial intelligence technology supported exports.

Taipei's statistics bureau said second-quarter gross domestic product growth slowed from 14.6 percent in the first quarter. Bloomberg News said the figure was above analysts' median forecast of 10.5 percent.

Taiwan's exports rose 21.6 percent year on year in the second quarter, which the statistics bureau said was mainly driven by sustained external demand for artificial intelligence and related applications. Imports grew 18.3 percent from a year earlier.

Gareth Leather, senior Asia economist at Capital Economics, said the growth rate remained strong and that investment growth should stay strong because of investment plans by Taiwan's major semiconductor companies.

Taiwan is a major manufacturer of semiconductors used to train and power artificial intelligence systems. It is home to TSMC, which makes chips from Nvidia designs, and Foxconn, which assembles processors into data centre servers.