Newsletter N°88 - April 2026 

With a striking 13.69% growth rate, the pace of Taiwan’s economic expansion reached its highest level in nearly four decades in the first quarter of 2026.Behind this remarkable performance for such a mature economy lies the strength of exports in the semiconductor sector, driven primarily by global demand for AI related infrastructure.

 

Confirming both this trend and the sector’s growing importance, the Taiwanese stock market surpassed the UK’s market capitalization in mid April, becoming the world’s seventh largest. The market is dominated by TSMC, which accounts for nearly half of its total valuation. TSMC reported record results for the first quarter, with revenues of USD 36 billion and net income of approximately USD 18 billion.The semiconductor industry is not the only contributor to these outstanding figures.

 

Unsurprisingly, given the current geopolitical environment, the defense sector is emerging as one to watch. Exports of Taiwanese drones surged in Q1 particularly to Eastern Europe? and the government is pushing for a USD 40 billion special budget to secure the production of 200,000 domestically made drones by 2033.

 

Disruptions stemming from the Middle East conflict remained relatively limited during the period. However, it remains to be seen whether this situation will persist in the coming months, as semiconductor production depends on a steady supply of helium from Qatar, and Taiwan imports more than two thirds of its oil through the Strait of Hormuz.