Economy in boom mode for 10th month, NDC says

BROADER SUPPORT: AI demand is also creating opportunities for suppliers of copper foil, circuit-board substrates and specialty chemicals, an official said

• By Crystal Hsu / Staff reporter

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Taiwan’s economy remained in boom territory for a 10th consecutive month last month, as surging demand for artificial intelligence (AI) hardware continued to drive growth despite an increasingly high comparison base, the National Development Council (NDC) said yesterday.

The economy’s monitoring indicator climbed to 41 last month from a revised 40 in August, marking its 10th consecutive month at levels that signal a boom — the longest such streak in records dating back to 1984.

That reflects a structural shift driven by AI investment, with Taiwan’s semiconductor industry and extensive network of suppliers helping spread the gains beyond major chipmakers, NDC Department of Economic Development Director Chen Mei-chu (陳美菊) said.

People look at their cellphones at a shopping mall food court in New Taipei City’s Shulin District yesterday.

Photo: CNA

“AI demand continues to grow despite an increasingly high comparison base,” she said.

The nation’s integrated supply chain gives it an advantage over economies that rely more heavily on a handful of large manufacturers, such as South Korea, Chen said.

Expansions by major companies have also boosted business for small and medium-sized enterprises, while the robust market positions of local chipmakers have given them greater pricing power.

Global cloud service providers are projected to spend about US$957 billion on capital expenditure this year, with the figure forecast to exceed US$1.5 trillion next year, TrendForce Corp (集邦科技) said.

Taiwan is well placed to capture a large share of that spending because its manufacturers supply the chips, components and equipment needed to build AI infrastructure, Chen said.

Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest contract chipmaker, plans to spend US$60 billion to US$64 billion this year, with total capital investment from this year through 2028 expected to exceed that of the preceding three years.

The AI boom is also creating opportunities for traditional industries, with demand growing for materials used in electronics manufacturing and machinery for Taiwanese companies expanding production overseas, Chen said.

Suppliers of copper foil, circuit-board substrates and specialty chemicals are benefiting from the expansion, while overseas factory investments by Taiwanese manufacturers are supporting exports of machinery and conventional industrial equipment.

The leading indicators, which gauge economic prospects over the next six months, rose 0.56 percent to 104.69. Four components increased: the floor area of building starts, the export-order trends index, manufacturing business sentiment and stock prices.

The coincident indicators, which track current economic conditions, edged up 0.01 percent to 105.21, supported by higher turnover in wholesale, retail and food services, stronger exports and longer overtime hours in the industrial and services sectors.

The NDC expects sustained global investment in AI infrastructure to continue supporting Taiwan’s exports of electronics and information and communications technology products.

Capital spending by domestic semiconductor, memory and substrate manufacturers, as well as investment by foreign companies in Taiwan, should provide additional support, it said.