TAIREF大幅上调经济增长至9.33%, warns of industry concentration risks amid AI boom

(Central News Agency reporter Pan Zi-Yu, Taipei, 16th) The Taiwan Institute of Economic Research (TAIREF) today significantly revised its 2026 economic growth forecast upward to 9.33%. It recognizes the artificial intelligence (AI) wave as a rare, historic growth opportunity for Taiwan, but warns of underlying risks, including industrial over-concentration and potential weakening of growth momentum if AI commercialization progresses slower than expected or if major tech companies adopt more conservative capital spending.

TAIREF updates its economic forecasts semi-annually. At the end of last year, it estimated 2026's economic growth rate at 3.46%. In its latest economic outlook released today, TAIREF states that Taiwan, leveraging its robust semiconductor and information and communications technology (ICT) supply chain advantages, has become a key beneficiary of the global tech supply chain amid the AI boom, prompting the substantial upward revision of the full-year growth forecast to 9.33%.

TAIREF analyzes that 2026 will be a year of coexisting risks and opportunities. Global demand for AI, high-performance computing (HPC), and cloud data center construction is growing rapidly, with related trade and investment booms serving as a major driver for global economic and technological development. At the same time, geopolitical risks in the Middle East escalated at the end of February, pushing up international crude oil and natural gas prices and increasing global inflationary pressures. As a result, 2026 is expected to be shaped by the simultaneous dominance of geopolitical conflicts and waves of technological innovation.

Examining the structure of Taiwan's economic growth this year, TAIREF points out that deepening global AI applications, along with sustained strong demand for semiconductors, AI servers, and ICT products, continue to support Taiwan's exports. It forecasts that the real growth rate of goods and services exports in 2026 will be 19.62%, while the real growth rate of imports will be 16.34%.

Moreover, aggressive capacity expansion in advanced semiconductor processes, advanced packaging, AI servers, and related supply chains has led to a significant increase in corporate capital expenditures and capital equipment imports, making private investment the second engine of economic growth. TAIREF forecasts a real private investment growth rate of 6.16% for 2026.

TAIREF notes that Taiwan's economy is forming a positive cycle: AI-driven external demand boosts exports, exports drive investment, and investment and income in turn support consumption.

While Taiwan is benefiting from the AI boom and achieving impressive economic performance, TAIREF cautions that AI development carries risks. Currently, the market holds highly optimistic expectations for the future profitability of the global AI industry, driving up tech stock valuations, corporate investments, and capital expenditures. However, if AI commercialization progresses slower than anticipated, or if large tech companies become more conservative in their capital spending, supply chain demand could be affected, thereby impacting Taiwan's export and private investment momentum.

Additionally, US-China tech competition, changes in tariff policies, and global supply chain restructuring continue to affect the international trade environment. Geopolitical risks in the Middle East, along with their impact on international oil prices, transportation costs, and global inflation pressures, require close monitoring.

With the AI-driven boom pushing Taiwan's stock market to repeatedly hit new highs, surpassing the 30,000 and 40,000-point milestones, media have focused on the outlook for future market performance. TAIREF founder Liu Tai-Ying, in an interview, stated that although the stock market is influenced by geopolitical factors and foreign economic conditions, the fundamentals remain robust, and he maintains an optimistic view of the Taiwan stock market.

Liu also pointed out that a peace agreement between the US and Iran could help stabilize energy prices. As long as uncertainties diminish, the US Federal Reserve still has room to cut interest rates. If this scenario unfolds, its impact on international stock markets will be noteworthy.

TAIREF warns that Taiwan's economic growth momentum is highly concentrated in the semiconductor and ICT industries. If the tech sector experiences a downturn, the impact on the overall economy will be greater than in the past. Therefore, while seizing the historic growth opportunity brought by AI, it is crucial to reduce industry concentration risks, simultaneously strengthen industrial balance and structural resilience, and enhance domestic demand momentum—key challenges for sustaining Taiwan's long-term, stable economic growth and international competitiveness.

Today, TAIREF also announced that the May Electricity Climate Indicator remains at the 'Red Light' (indicating a robust economy). The manufacturing sector continues to show steady growth, and the economic growth rate for May is projected at 11.6%. (Edited by Lin Shu-Yuan) 1150616