Taiwan’s rising prominence in the global artificial intelligence (AI) supply chain has powered a significant stock market rally, driven by soaring demand for advanced chips and servers.
Taiwan’s economy is surging on the back of booming global demand for AI and advanced technology, with export orders in March jumping 65.9% year on year to a record $91.12 billion, the fastest growth in more than 16 years, according to the Ministry of Economic Affairs.
The figure, well above expectations and marking a 14th straight monthly rise, was driven by strong demand for AI‑related products, with telecommunications orders up 120.9% and electronic products rising 73.7%, while orders from the United States surged 76.4%, China rose 45.7%, Europe increased 45.2%, and Japan climbed 32.9%, underlining Taiwan’s expanding role at the heart of the global technology supply chain despite lingering geopolitical and trade uncertainties.
Ross Feingold, a Political Risk Analyst, in an interview with AnewZ on the Day Break programme, said, “The boom in demand for AI chips and servers has greatly benefited Taiwan tech companies,” noting that the ripple effects extend well beyond a single firm.
At the centre of this boom is Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading producer of cutting‑edge semiconductors, alongside a broader network of Taiwanese companies supplying components, equipment and infrastructure for AI technologies.
“It’s not just TSMC. There are other companies here in Taiwan in the supply chain for AI chips and servers and other related equipment that benefit substantially. And that’s powered the stock market boom.”
Despite the market’s strong performance, the benefits of the AI surge are not shared equally across Taiwan’s economy. The island’s 23 million people work in a diverse range of sectors, many of them outside high‑tech manufacturing.
“Not everybody is a computer science engineer, and not everybody is part of the tech supply chain,” Feingold said.
He pointed out that large parts of Taiwan’s economy remain based in traditional industries, which face stiff competition from neighbouring economies with lower costs and better access to regional trade agreements.
“We do see a growing wealth gap here in Taiwan, because not everybody benefits,” he added.
Taiwan’s central role in global semiconductor manufacturing has also heightened its strategic importance. Many international companies, as well as governments, rely heavily on Taiwanese production, making stability in the Taiwan Strait a global concern.
“That’s a concern not just for policymakers here in Taiwan, but for policymakers in other countries as well,” Feingold told AnewZ, highlighting how dependence on Taiwan’s tech supply chain has pushed countries such as the United States, Japan and members of the European Union to offer subsidies to lure Taiwanese manufacturing abroad.
“This puts Taiwan in a really interesting conundrum,” he said. “On the one hand, Taiwan wants to maintain that role. On the other hand, countries are saying it’s risky to rely so heavily on manufacturing in Taiwan.”
For now, investors continue to show confidence. Taiwan’s stock market has long been open to foreign participation, and both domestic and international investors have enjoyed strong returns. Employees in major technology firms have also benefited from generous share‑based bonuses.
However, Feingold warned that geopolitical risk remains a constant backdrop. “The first thing that would happen if tensions significantly increased is that foreign investors would flee,” he said. “They could take their money out of Taiwan within hours or days, and that could trigger a crash.”
“As much as there’s talk about AI being a boom or a bubble, the geopolitical risk is just as significant,” he added.
Successive Taiwanese governments have actively supported the technology sector through land provision, tax incentives and infrastructure investment. That approach is expected to continue, regardless of which political party is in power.
At the same time, the current administration under President William Lai is pushing for higher defence spending, arguing that stronger deterrence is essential amid rising tensions with China. But Feingold cautioned that matching China’s military spending is unrealistic. "China invests enormous amounts of money in its military. It’s very difficult to keep up,” he said.
Relations between Beijing and Taipei remain frozen, with China cutting off dialogue with Taiwan’s elected government and actively restricting its international engagement. Symbolic diplomatic efforts, such as overseas visits by Taiwan’s leaders, have little direct impact on security or economics but carry political weight.
“It’s very frustrating for the government of Taiwan,” Feingold said. “But practically speaking, these diplomatic limitations don’t change Taiwan’s military or economic security. It’s more about the optics and international presence.”
Taiwan’s AI‑driven success has placed it at the forefront of global technology, boosting markets and drawing international attention. But alongside that success come deep structural challenges, rising inequality, pressure on supply chains, and the ever‑present risk of geopolitical escalation.
As Feingold put it, Taiwan finds itself “in a lucrative space”, one that offers enormous opportunity, but also significant uncertainty.
An Iranian drone and missile attack struck Kuwait International Airport early Wednesday, injuring several people, damaging Terminal 1 and forcing flig...
Minval Politika has published new video material which it says points to informal political understandings between Armenian businessman Samvel Karapet...
Thousands of people have taken to the streets in Albania in recent days to protest against a luxury tourism project linked to Jared Kushner, the son-i...
Bolivia’s Defence Minister has resigned amid widening unrest over government austerity measures, which have led to protesters blocking roads into th...
Armenia’s parliamentary election comes at a defining moment for the South Caucasus, a region reshaped by the Garabagh conflict and broader shifts in...
China's Coast Guard said on Monday it had carried out what it described as "law enforcement" patrols in waters east of Taiwan, saying the move was a response to plans by Japan and the Philippines to begin maritime boundary delimitation talks in an area Beijing claims falls under its jurisdiction.
U.S. Defense Secretary Pete Hegseth has urged Asian allies to increase military spending, warning of growing concern over China’s rapid military expansion and wider activities in the region.
A potential call between U.S. President Donald Trump and Taiwan President Lai Ching-te has triggered sharp warnings from China, underlining once again how sensitive Taiwan remains in relations between Beijing and Washington.
Taiwan’s President Lai Ching-te has reaffirmed the island’s commitment to sovereignty and regional stability following the recent meeting between U.S. President Donald Trump and Chinese leader Xi Jinping.
Police officers were pelted with missiles during violent clashes at a protest near the Southampton home of convicted murderer Vickrum Digwa, as anger continued to grow over the handling of the fatal stabbing of 18-year-old Henry Nowak.
Competing narratives continue to shape perceptions of the war in Ukraine, with Russian leadership suggesting a possible end phase while Ukrainian officials warn of renewed large-scale attacks and ongoing escalation risks.
Severe Tropical Storm Jangmi brought heavy rain, power cuts and transport disruption across Japan on Wednesday (3 June) as it tracked towards the greater Tokyo region.
An Iranian drone and missile attack struck Kuwait International Airport early Wednesday, injuring several people, damaging Terminal 1 and forcing flight diversions, Kuwaiti authorities said.
Global weather forecasters predict a strong El Niño will develop in the second half of 2026, bringing hotter, drier conditions to much of Asia while increasing rainfall in parts of North and South America.
China will send an astronaut to its space station on Sunday for a one-year mission, the longest duration for the country so far. The mission will help study long-duration human physiology in space as China works toward a crewed Moon landing by 2030.
Anxiety over artificial intelligence is hardening among young workers as executives promote faster adoption and companies point to automation in fresh job cuts.
Hackers are increasingly using artificial intelligence to detect software vulnerabilities, reducing the time organisations have to respond to cyber threats, Verizon said in its annual data breach report.
China has launched the world’s first experiment to study how artificial human embryos develop in space, marking a major step in understanding whether humans could one day reproduce beyond Earth.
Japanese filmmaker Koji Fukada has said that the use of artificial intelligence (AI) to “jump straight to the result” risks undermining the purpose of art, which he believes should be rooted in self-expression and a deeper understanding of the world.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment