Taiwan imports 96% of its energy, and oil markets have been in chaos for three months running.
Yet its statistics bureau just raised the 2026 growth forecast to 9.64%, calling export demand "beyond expectations."
The export growth forecast jumped from 22.22% to 39.77%, putting Taiwan on track for its strongest export year since 1976 - back when the island was still building its first chip factories.
Q1 GDP came in at 14.55%, the fastest pace since 1981.
The reason is straightforward: Taiwan makes the chips that make AI possible, and global demand keeps climbing.
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TSMC - the chipmaker that supplies Nvidia and Apple - earned $18.2 billion in the March quarter alone, more than double its haul from the same stretch two years ago.
The company just told staff they'll get a profit-sharing bump of more than 30% this year.
Taiwanese tech firms have raised a record $14.5 billion in debt deals this year to fund new AI capacity, helping push the Taiwan stock market past India to become the world's fifth-biggest by market cap.
Industrial output rose nearly 14.2% year over year - strong, but the slowest reading since March of last year.
The slowdown comes as higher energy costs bite parts of the economy outside tech, especially anything tied to oil and coal.
Inflation is creeping up too, with Bloomberg Intelligence estimating May CPI hit 2.1% - above the central bank's 2% comfort level.
One central bank board member has already floated the first rate hike since late 2023 if the Iran conflict drags past 150 days and pushes oil higher than state-owned CPC Corp. can absorb.
For now, the head of Taiwan's statistics bureau put it simply: Middle East tensions are a negative, but the impact is "far outweighed by the positive impact brought by AI."
An island that imports nearly all its energy is on track for its best year in five decades.
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