TAIPEI, Oct 23 (Reuters) - Taiwan's economy could grow

more than 3% next year given demand for artificial intelligence

(AI) applications continues at a rapid clip, Economic Affairs

Minister Kung Ming-hsin said on Thursday, offering a rosier

outlook than previous forecasts.

Last month, Taiwan's central bank predicted the economy next

year could expand 2.68%, down from an estimated 4.55% for this

year, citing the impact of U.S. tariffs on Taiwanese exports,

currently set at 20%.

Speaking to reporters in Taipei, Kung said he was "quite

optimistic" that growth next year could top 3% given the fast

growth of AI.

Taiwan is a major semiconductor producer and home to the

world's largest contract chipmaker TSMC, which

supplies Nvidia ( NVDA ) and other companies powering the charge

towards AI.

Taiwan's statistics bureau will next week give its

preliminary read on third-quarter economic growth, though it

will not update its outlook for all of 2025 and 2026 until a few

weeks later.

Taiwan remains in talks with the United States to try and

get the tariff, which does not apply to semiconductors, reduced.