Jakarta, INTI - Goldman Sachs Group Inc. economists predict that Taiwan and South Korea will benefit from the booming chip industry and growth of artificial intelligence (AI).
These two countries are expected to see record trade surpluses, prompting their central banks to raise their benchmark interest rates by the end of 2026.
The economists predict South Korea will raise interest rates by 25 basis points in the third and fourth quarters, and 12.5 basis points in Taiwan in the second and fourth quarters.
It is estimated that the surge in technology exports will push the current account surplus beyond 10% of gross domestic product (GDP) in Korea by 2026 and beyond 20% of GDP in Taiwan.
“This AI boom represents the strongest technology cycle ever recorded for Korea and Taiwan. In contrast, non-tech exports are expected to remain weak amid regional oversupply and the recent energy shock,” the economists said.
The Surge will Push the Economy
Taiwan’s economy grew at its fastest pace since 1987 in the first quarter, and South Korea’s exports continued to surge, with semiconductor chip shipments a key driver. This situation poses a problem for policymakers because the dual-speed nature of growth means that only a few workers are pulling ahead while others are left behind.
Additionally, there is still considerable upside potential for both economies. Chetan Ahya, Chief Asia Economist at Morgan Stanley in Hong Kong, stated that Asia is entering an industrial supercycle driven in part by the boom in artificial intelligence and AI-related infrastructure.
Goldman Group economists predict South Korea's GDP growth will rebound to 2.5% this year, from 1% in 2025, while Taiwan's GDP growth is expected to accelerate to nearly 10% in 2026, from 8.7% last year. Goldman economists said that the technology boom is likely to increase growth volatility.
Conclusion
Goldman Sachs economists predict that Taiwan and South Korea will be the countries that will benefit most from the AI-powered chip industry boom. The surge in technology exports is expected to push the two countries' trade surpluses to record levels and prompt central banks to raise interest rates by the end of 2026. Goldman Sachs estimates that South Korea's current account surplus could exceed 10% of GDP, while Taiwan's has the potential to reach beyond 20% of GDP.
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