Taiwan's economy benefits from strong tech shipments amid the AI surge, with export orders rising 31.1% in February, surpassing estimates. Taiwan Semiconductor Manufacturing Co., the largest company on the island, reported a 39% revenue increase in early 2025. However, there are concerns about the sustainability of the AI boom, especially after China's DeepSeek demonstrated a more cost-effective approach. Additionally, Taiwanese shares experienced significant foreign investor sell-offs, reflecting global uncertainties in the tech sector.
Key takeaways:
- Taiwan's central bank held its benchmark interest rate at 2%, the highest since 2008, amid uncertainties like potential chip tariffs from the Trump administration and AI market outlook.
- All 29 economists surveyed by Bloomberg expected the rate to remain steady for the fourth consecutive quarter.
- The central bank may raise its consumer price index forecast to 2.04% if prices for railway tickets, water, and power increase.
- Taiwan's economy is supported by strong tech shipments during the AI boom, with export orders rising 31.1% in February, surpassing estimates.