What is the performance impact of TypeScript and how can you optimize it?

TypeScript type-checking is computationally intensive and can slow down build times in large codebases. Common performance bottlenecks: (1) Complex generic types and deeply recursive conditional types that cause excessive type instantiation. (2) Large union types (thousands of members). (3) Too many files processed together. (4) Re-exporting types through many re-export layers. Optimization strategies: (1) Use interface instead of type for object shapes — interfaces are cached and faster. (2) Enable project references (--build) to compile sub-projects independently with incremental builds. (3) Use "incremental": true in tsconfig for incremental type-checking that only rechecks changed files. (4) Use "skipLibCheck": true to skip checking declaration files. (5) Use isolatedModules with a fast transpiler (Babel/SWC/esbuild) for development, with separate tsc for type-checking. (6) Avoid recursive types that are too deep. (7) Break up large union types into intermediate types. Use the TypeScript compiler's --extendedDiagnostics and --generateTrace flags to identify bottlenecks.