DBS Forecasts 7% Taiwan GDP Growth on Strong AI Demand

Taiwan has become a pivotal hub for global technology and financial markets, supported by its advanced manufacturing processes and deep integration into the semiconductor supply chain amid the global AI supercycle. AI is shifting from generative systems toward agentic and physical AI. Despite bottlenecks in monetization and financing, the transformation is reshaping the global division of labor and having a profound impact on Taiwan’s strategic position and long-term development in the world economy.

DBS Bank maintained its forecast for Taiwan’s GDP to grow 9.4% this year in an outlook report released on July 16, 2026, while predicting growth would slow to about 4% in the fourth quarter. Fueled by AI momentum, Taiwan’s economy could exceed $1 trillion this year, with GDP per capita reaching $40,000. DBS also expects the U.S. dollar to retreat and the yen to remain weak in the second half, while the AI supercycle is forecast to normalize during the same period. Semiconductor cooperation between Taiwan and Singapore is expected to continue deepening.