Taiwan Cooperative Financial Says Global AI Boom Could Lift Taiwan’s Second-Half Growth to 8%

A joint research team from Cathay and National Taiwan University said rising global demand for AI infrastructure and stronger-than-expected corporate capital expenditure were driving robust export growth across Taiwan's semiconductor and information and communications technology supply chains. Because exports are the main engine of Taiwan's economy, that momentum will directly affect manufacturing investment, employment and full-year economic performance.

As of July 20, 2026, the team had sharply raised its forecast for Taiwan's 2026 economic growth to 10.1%. It also projected that its third-quarter economic climate indicator would shift to “sunny,” signaling expansion, while financial conditions would remain accommodative. The reports did not disclose a specific figure for AI-related capital expenditure.

Expanding AI server capacity and data centers has boosted exports and corporate investment, making it the main engine of Taiwan’s economy. Cathay United Bank Chief Economist Lin Chi-chao said the wave of AI capital spending is supporting the technology sector while also influencing financial-stock valuations, Taiwan’s stock market and the New Taiwan dollar, making it crucial to broader asset allocation.

Taiwan’s 2026 economic growth forecast has been raised to 9.64%, the highest in nearly 16 years. Lin estimates that AI capital-spending momentum could continue through 2027, while the market is even weighing whether the TAIEX could test 50,000 points over the next year and the New Taiwan dollar could hold at 31 to the U.S. dollar. In the second half, investors will need to watch for volatility stemming from U.S. Section 301 tariffs and Federal Reserve policy.

Sustained demand for artificial intelligence is boosting Taiwan’s exports of semiconductors and information and communications technology products while spurring corporate investment, employment and private consumption, creating a virtuous cycle across domestic and external demand. The Taiwan Research Institute said the expansion is being driven mainly by high-tech industries, underscoring Taiwan’s pivotal role in the global AI supply chain while leaving the broader economy increasingly dependent on a small number of sectors.

The Taiwan Research Institute has raised its latest forecast for Taiwan’s 2026 economic growth to 9.33%, citing strong external demand related to AI. The reports did not disclose specific amounts for new investment or exports. The institute also warned that growth concentrated in the semiconductor and information and communications technology sectors could reverse quickly if AI commercialization falls short of expectations or leading technology companies cut capital expenditure, amplifying economic volatility.

The Cathay-NTU industry-academia research team, which has long tracked Taiwan’s economy and financial conditions, said sustained growth in global artificial intelligence demand was driving exports and corporate investment in products including semiconductors and servers. It said this had become a key engine of economic growth, underscoring the technology supply chain’s importance to the broader economy.

The team raised its latest forecast for Taiwan’s 2026 economic growth to 5.8%, citing stronger-than-expected AI-related exports and investment. It also warned that the conflict in the Middle East could push up crude oil and other energy prices. A prolonged conflict would add to imported inflationary pressure and pose a major uncertainty for the 2026 economic outlook.