AI Boom Pulls Taiwan Economy Closer to US, Away From China

Taiwan first made its name as one of the Four Asian Tigers through export-led manufacturing, but semiconductors and AI hardware now power its growth. Chris Horton, a former Bloomberg News reporter, argues that a decade-long shift under presidents Tsai Ing-wen and Lai Ching-te has reduced dependence on China and tied the island more closely to U.S. technology demand. Taiwan’s chip prowess places it at the center of the U.S.-China technology rivalry, turning supply-chain realignment into a major economic driver.

In a July 21 article for The Wire China, Horton said Taiwan’s economy expanded by nearly 15% in the first quarter of 2026. U.S. government data showed Taiwan’s exports of goods and services to the United States reached $116.1 billion in the first five months, topping China’s $105.5 billion for the first time since 1992. Rupert Hammond-Chambers, president of the US-Taiwan Business Council, estimated Apple, Microsoft, Amazon, Google, Oracle and Meta will spend $750 billion to $1 trillion on AI infrastructure this year.