DBS Group Research, led by Ma Tieying, has released an assessment of Taiwan's AI-driven economic expansion and its implications for the second half of 2026. According to the report, AI remains the central theme shaping Taiwan's technology-oriented economy, with the AI supercycle approaching a cyclical peak. DBS monitors the AI cycle through three key indicators: AI token usage, hyperscaler capital expenditure, and semiconductor demand and supply, all of which suggest that the momentum of the AI supercycle is nearing its peak [1].
The research notes that Taiwan entered 2026 with exceptionally strong economic momentum. For the remainder of the year, DBS expects Taiwan to maintain above-trend growth through the third quarter of 2026, before economic activity begins to normalize from the fourth quarter onward. The bank also highlights that inflation is expected to remain sticky, prompting revisions to GDP and CPI forecasts [1].
DBS characterizes the AI outlook as balanced between strong structural optimism and rising cyclical caution, reflecting both the ongoing opportunities in AI and the potential for a slowdown as the current cycle matures [1].
CONCLUSION
DBS Research anticipates that Taiwan will sustain robust, above-trend growth through Q3 2026, driven by the AI sector, before normalizing in Q4. While structural optimism remains, the nearing peak of the AI supercycle introduces a note of caution for the market outlook.