(Bloomberg) -- Taiwan lifted its forecast for economic growth next year as exports continue to surge on AI demand.

Most Read from Bloomberg

High-Rises Are Changing the Slovak Capital of Bratislava Beyond Recognition

Bikeshare Shouldn’t Kick Tourists to the Curb

Europe’s Largest Capital Without a Subway Is Finally Getting One

DC Mayor Bowser Won’t Seek Reelection in 2026

Gross domestic product is expected to expand 3.54% in 2026, according to a statement from the statistics bureau in Taipei on Friday. That compares with the previous forecast of 2.81% back in August. Exports were projected to grow 6.32%, versus an earlier call of 2.19%.

The bureau also said the economy was expected to grow by 7.37% this year, compared to the previous forecast of 4.45%. The new figure would be the fastest expansion since 2010.

The new estimates come as debate mounts over the business prospects for companies linked to the AI revolution. Earlier this month, Taiwan Semiconductor Manufacturing Co. reported its slowest monthly revenue growth in more than a year. The main chipmaker to AI leader Nvidia Corp. posted a 16.9% rise in sales for October, though that did roughly track with the average analyst estimate.

Taiwan’s economy has benefited from roaring exports this year. In October, outbound shipments surged at the fastest pace since 2010, largely due to massive demand for the chips and servers powering AI. Exports to the US skyrocketed 144.3% to a record — underscoring Taiwan’s key role in the tech supply chain as companies like Meta Platforms Inc. and OpenAI race to build AI infrastructure.

Roaring tech exports have eased worries about US President Donald Trump’s trade war. Many analysts had worried that tariffs would hit Taiwan’s economy, especially in the second half of 2025, but since many tech goods have mostly been exempted from the duties, that hasn’t come to pass.

The Trump administration hit Taiwan with a 20% tariff rate on July 31 — a level that is higher than what the US has levied on South Korea and Japan. Officials in Taiwan have indicated they are trying to clinch a better deal with Washington but that has proven elusive so far.

(Updates with more details)

Most Read from Bloomberg Businessweek

Pulte’s Move to Fix Credit Scores Is Bad News for Homebuyers

The AI Industry Is Built on a Big Unproven Assumption

Target Needs More Than a Vibe Shift to Turn Its Business Around

The Dirty Secret of Biodegradable Plastic

Permabull Tom Lee Sees Bitcoin as High as $200,000 by January’s End

©2025 Bloomberg L.P.