Taiwan, South Korea AI Chip Exports Surge; Asia Economic Growth Driven by Semiconductor Boom
Taiwan and South Korea are posting record economic growth fueled by explosive demand for AI-related semiconductor exports, offsetting headwinds from rising oil prices in a global economic shift toward tech-led expansion.
Taiwan Set for 16-Year Economic High
In Taiwan, the government expects the economy to grow 9.6% in 2026. This would be the highest growth rate recorded in 16 years. This stellar performance is mostly related to the massive growth of AI. Taiwan produces a very large share of the world's most advanced chips, which are of crucial importance to AI. The economy already grew 8.8% in 2025—the highest in 15 years. This strong growth is being fueled by exports, which are expected to grow 39.8% in 2026.
South Korean Exports Surge Despite Oil Headwinds
The new governor of the Bank of Korea estimates that strong exports of AI-related chips will boost real economic growth by 0.7 percentage points in 2026—more than offsetting the negative impact of higher oil prices, which will reduce growth by 0.4 percentage points. The South Korean economy has been buttressed by strong exports of high-end chips used in AI tech. Such exports were up 139% in the first quarter of this year versus a year earlier. Meanwhile, other industries are struggling in the face of higher oil prices, including shipbuilding, steel, and petrochemicals.
Export-Driven Growth With Minimal Inflation
Given that strong economic growth is not being fueled by domestic demand, the economy is not generating much inflationary pressure. This, in turn, implies that the central bank will probably leave the interest rate unchanged this year. Moreover, he estimated that the government's supplementary budget, meant to help the economy to adjust to the oil-price disruption, will add 0.1 to 0.2 percentage points to the country's gross domestic product.
Global Shift in Growth Drivers
The surge in Taiwan and South Korean chip exports reflects a broader reorientation of global growth patterns away from traditional sectors toward technology and artificial intelligence infrastructure. While these two Asian economies are positioned to benefit enormously from the AI buildout, this concentration of growth in semiconductors also underscores the importance of uninterrupted supply chains and the vulnerability of the global economy to any disruption in this critical sector.