October 1, 2025
The Asian Development Bank (ADB) has sharply revised upward its growth outlook for Taiwan, projecting a 5.1% GDP expansion in 2025, up from its earlier forecast of 3.5% in July. The revision highlights Taiwan’s resilience and booming technology sector, in stark contrast to South Korea, which is expected to grow by just 0.8% this year.
According to the ADB, Taiwan’s economy expanded by 6.8% in the first half of 2025, fueled by surging demand for advanced semiconductors amid the global artificial intelligence (AI) boom. The strong performance has positioned Taiwan among the fastest-growing economies in East Asia.
South Korean media outlets described the trend as a “turnaround moment” for Taiwan, emphasizing that its growth rate is more than six times higher than South Korea’s. Analysts noted that Taiwan has emerged as a key winner from global trade realignments and tariff policies, capitalizing on the rapid expansion of high-performance chip demand.
Taiwan’s export momentum has been particularly striking. In the second quarter, exports jumped 35% year-on-year, up from 19% in the first quarter. This surge was partly attributed to a “front-loading” strategy, where companies rushed shipments ahead of new U.S. tariff implementations.
At the same time, domestic investment has accelerated. Private sector capital expenditures climbed 18.2% in the first half of 2025 compared to the previous year, with a heavy focus on semiconductor manufacturing equipment. According to SEMI data, Taiwan spent US$15.8 billion on semiconductor equipment in the first half of the year, surpassing South Korea’s US$13.6 billion.
While South Korea has also been investing to prepare for AI-related semiconductor demand, it continues to face challenges from U.S. export restrictions on high-bandwidth memory (HBM) and broader tariff pressures affecting industrial production.
Looking ahead, the ADB expects Taiwan to maintain its growth momentum, forecasting a 2.3% expansion in 2026, compared with South Korea’s projected 1.6%.