Taiwan’s economy could grow by more than 3% next year if demand for artificial intelligence (AI) applications continues to surge, Economic Affairs Minister Kung Ming-hsin said on Thursday, offering a more optimistic outlook than previous forecasts. Speaking to reporters in Taipei, Kung said he was “quite optimistic” that growth in 2026 could exceed 3%, driven by the rapid expansion of AI-related industries, Reuters reported. Last month, Taiwan’s central bank projected the economy would grow 2.68% next year, down from an estimated 4.55% for 2025, citing the impact of US tariffs on Taiwanese exports, currently set at 20%. Taiwan, a major semiconductor producer and home to the world’s largest contract chipmaker, TSMC, supplies Nvidia and other firms, fueling the global AI boom. The government remains in talks with the United States to seek a reduction in the tariffs, which currently exclude semiconductors.