Taiwan’s economy expanded at the fastest pace in almost three years as global demand for artificial intelligence-related technologies fueled a boom in exports.

Gross domestic product grew 6.51% year-on-year to NT$5.46 trillion in the first quarter, according to a statement from the statistics bureau in Taipei on Tuesday (April 30), the fastest pace since the second quarter of 2021. That was stronger than the 6% increase economists had forecast in a Bloomberg survey.

Taiwan’s economy is one of the main beneficiaries of a surge in global demand for the hardware underpinning AI technologies, such as semiconductors and servers. GDP is likely to expand by 3.43% this year, the statistics bureau said in its most recent forecast in February.

Taiwan’s exports surged 18.9% in March, the fastest pace in two years, as shipments of computers and related hardware needed for AI rocketed more than 400%.

But the first quarter may be as good as it gets for a while. Economists and government statisticians say growth is likely to slow in the coming quarters, due in part to a higher base of comparison with last year’s figures.

In the past few weeks, chip giants Taiwan Semiconductor Manufacturing Co and Intel Corp have both offered tepid forecasts for semiconductors and the global smartphone and personal-computing markets.

The more pessimistic outlook triggered an exodus from Taiwanese stocks by foreign investors. Overseas money managers withdrew US$4.9 billion from local shares in April as of Monday’s close, Bloomberg-compiled data show. That would be the biggest net outflow since October last year.

  - Bloomberg