Taiwan's economy grew 12.92 percent in the second quarter of 2026

Government data released on Friday 31 July 2026 showed Taiwan's economy grew 12.92 percent in the second quarter of 2026, which ended in June. The island's gross domestic product rose 8.63 percent in 2025 and 13.69 percent in the first quarter of this year. Its stock exchange also became the fifth largest in the world by market capitalisation earlier this year, overtaking the United Kingdom, Canada and India.

The main driver is technology and AI related chip exports to the United States. Last year the US imported $201bn worth of goods from Taiwan, nearly double the $116bn of 2024, and in May Taiwan overtook China to become the third largest source of US imports, after Mexico and Canada. Experts say Taiwan produces about 90 percent of the advanced chips used to power leading AI models.

Under an agreement with the US administration, Taiwan will invest $500bn in the United States, half of it as direct investment by semiconductor and technology firms, and it has cut its tariffs on 99 percent of US exports. Reza Hasmath, an academic faculty adviser at The China Institute at the University of Alberta, warned that Taiwan's trade surplus with the US, close to $200bn, is an unbalanced relationship that is not conducive to Taiwan in the long term. TSMC alone accounts for up to 40 percent of the stock market and four percent of GDP growth, while the chip industry employs at most 350,000 people.