Taiwan's top state-run research institution has projected that the country's economic growth rate will surpass 10% this year, fueled by the artificial intelligence (AI) boom.

According to Taiwan's Central News Agency on Monday (July 13), the Institute of Economics at Academia Sinica, Taiwan's national academy, announced a growth forecast of 10.16% for this year.

This figure is a significant increase of 6.45 percentage points from its previous forecast of 3.71% made in December last year.

This projection is the most optimistic among those released by Taiwanese think tanks to date, and Academia Sinica is the first institution to forecast a double-digit growth rate for this year.

Lin Chang-ching, a researcher representing the forecasting team, compared Taiwan's economic situation to a rising sun. "Demand for AI hardware goes beyond a simple economic cycle; it is a core investment for building global cloud infrastructure and high-performance computing capabilities," Lin said. "It will drive Taiwan's growth momentum within the global science and technology supply chain."

The institute expects that global demand for AI, high-performance computing, and cloud services will continue through the second half of this year, keeping exports of high-performance semiconductors, servers, and related components strong.

However, the institute noted that despite the series of upward revisions in growth forecasts by the Taiwanese government and various think tanks, several variables remain.

"While global AI investment has become a key driver for the development of new science and technology industries, its future progress will be influenced by the scale of capital expenditure (capex), the realization of profit models, and infrastructure bottlenecks," the institute analyzed. "If the financial leverage of AI-related companies continues to expand, there is a risk of increasing volatility in international financial markets."

Regarding concerns raised in some parts of the market about a potential slowdown in AI capital expenditure, Lin dismissed the possibility, stating, "The probability of this happening this year is not very high, and any related impact is more likely to appear next year or the year after."

(Photo: AP, Yonhap News)