AI Demand Drives Taiwan’s Q1 GDP Growth to 13.69%, the Highest in 39 Years

Y's Consulting Group, which provides market trends and industry information on Taiwan and is headquartered in Taipei, Republic of China, with Yasushi Yoshimoto as its representative, announced that the May 11, 2026 issue of Weekly Taiwan Business News covers essential updates for understanding Taiwan today. These include a detailed report on Taiwan’s first-quarter economic growth rate, which reached its highest level in 39 years thanks to AI-driven demand, the impact of escalating Middle East tensions on Taiwan’s logistics, strengthened industrial cooperation following the Paraguayan president’s state visit to Taiwan, and the latest diplomatic and business developments between Japan and Taiwan. Highlights: AI demand leads the way: Taiwan’s Q1 GDP growth reaches 13.69%, the highest in 39 years Taiwan’s Directorate-General of Budget, Accounting and Statistics under the Executive Yuan announced that real gross domestic product (GDP) growth for the first quarter, from January to March, reached an estimated 13.69%. This represents a sharp upward revision of 2.23 percentage points from the February forecast and marks the highest level in the past 39 years. The main driver was exports of semiconductors and information and communications technology (ICT) products, which significantly exceeded forecasts amid strong demand for AI. Personal consumption also remained robust, supported by wealth effects from rising stock prices. As a result, Taiwan’s full-year 2026 GDP per capita is increasingly likely to enter the USD 40,000 range. This week’s key business and economic topics: 1. International and logistics: Impact of Iran-related military tensions leaves eight Taiwanese vessels stranded in the Strait of Hormuz Amid heightened tensions in the Middle East, around 1,600 vessels, including eight operated by Taiwanese companies, have been held up in the Strait of Hormuz, a critical route for energy transportation. Premier Cho Jung-tai instructed the government to coordinate with the Ministry of Foreign Affairs and the Ministry of Transportation and Communications to support the passage of Taiwanese vessels. He also indicated that measures to ensure the supply of daily necessities and stabilize markets would continue to be reviewed. 2. Diplomacy and industry: Paraguayan President Peña visits Taiwan and strengthens industrial cooperation through visits including the Southern Taiwan Science Park Santiago Peña, president of Paraguay, Taiwan’s only diplomatic ally in South America, made his first state visit to Taiwan. He was accompanied by 39 representatives from industry, including the minister of industry and commerce. During the visit, events are scheduled to include the conferral of Taiwan’s highest order, the Order of Brilliant Jade, the signing of multiple cooperation and exchange agreements, and a visit to the Southern Taiwan Science Park Bureau. An investment briefing by Paraguayan companies participating in the delegation will also be held, raising expectations for deeper economic exchange between the two countries. 3. Japan-Taiwan relations: Japan-Taiwan Exchange Association Chairman Sumi meets President Lai to expand cooperation in key industries President Lai Ching-te met with Shuji Sumi, chairman of the Japan-Taiwan Exchange Association, at the Presidential Office. During the meeting, Lai expressed gratitude for Japan’s international support for Taiwan. The two sides also exchanged views on further expanding Japan-Taiwan relations based on more than 100 memoranda of understanding signed to date. Sumi noted that key industries such as semiconductors, AI, and ICT will be central to future economic development, and emphasized the need for Japan and Taiwan to expand cooperation as partners that share common values. Additional commentary is available in the following video: https://www.youtube.com/watch?v=eytSYbJ1xQc Weekly Taiwan Business News provides the latest business information from Taiwan. For ongoing coverage of Taiwan business trends: Y'sNews is an information service that delivers daily Japanese-language updates on Taiwan’s business, economic, and industrial trends. Latest news is delivered at 5 p.m. on weekdays, and a two-week free trial is available. Details and application: https://www.ys-consulting.com.tw/service/news/member.html#shidoku Company overview: Company name: Y's Consulting Group Location: 8F, No. 9, Xiangyang Road, Taipei City, Republic of China Representative: Yasushi Yoshimoto Established: November 1996 URL: https://www.ys-consulting.com.tw/ Business activities: Management consulting, including human resources and labor affairs, marketing, management strategy, and information security Human resource training, including level-based and job-specific training Distribution of Japanese-language Taiwan economic news and machinery industry journals Market research, industry research, and customer research Cloud service sales Contact: Y's Consulting Membership Services Department e-mail: info@ys-consulting.com TEL: +886-22381-9711, 10:00 to 19:00 Japan time