TAIPEI — The head of Taiwan’s central bank delivered a cautionary message Thursday, acknowledging that while the artificial intelligence boom is fueling genuine economic growth, it also carries serious bubble risks that must not be ignored.
Appearing before lawmakers at a parliamentary hearing, Governor Yang Chin-long described the AI surge as a significant engine for Taiwan’s economy — but stressed that regulators need to keep a close eye on speculative spending funded by heavy corporate debt in the technology sector.
“We do have concerns about the possibility of an AI bubble,” Yang told lawmakers. “AI is driven by real growth potential, but it’s the possibility of over-expansion via over-leveraging that concerns us.”
At the central bank’s quarterly board meeting in June, officials determined that inflation pressures tied to the AI boom were not strong enough to warrant raising interest rates, though the vote to keep rates unchanged was not unanimous. Governor Yang defended that call, noting that traditional industries have been lagging behind the high-flying tech sector, making a rate hike difficult to justify.
Taiwan occupies a critical position in the worldwide AI supply chain, serving major technology companies including Nvidia and Apple. That role is anchored largely by chipmaker Taiwan Semiconductor Manufacturing Co., known as TSMC, which has helped push Taiwanese stocks to record levels this year.
The outsized importance of Taiwan’s chip industry to AI development is underscored by the frequent high-profile visits to the island by Nvidia CEO Jensen Huang, including a major trip in June for events such as Computex and NVIDIA GTC Taipei.
TSMC, the world’s largest contract chip manufacturer producing the processors that power AI systems, reported last month that customer demand remains strong and that clients continue to hold an optimistic view of the AI market — even as the company keeps watch on the effects of rising component costs.
