Taiwan AI-related exports and production are still exploding. Monthly exports have doubled in dollar terms since the beginning of 2024, blowing past broad EM, and are still increasing at a dizzying pace - matched by an explosion in headline industrial production as well. As before, both of these trends are overwhelmingly driven by data servers and related computer equipment headed to the US market.

External surpluses are also shooting up. The current account balance is now more than 20% of GDP on a 12-month basis and still increasing rapidly.

Meanwhile, there's nothing at all happening in the rest of the economy. Despite the insanely big 13.7% real GDP growth print in Q1, consumption, wages, construction and credit are all essentially flat (or falling), as are locally-derived corporate earnings.

We maintain equity and FX exposure. The broad Taiwan equity index is massively outperforming, driven by the strong share of IT and electronics names, and we keep our long position. There's nothing happening on TWD policy to date ... but again, with exploding external surpluses things could get interesting.